TEMPO.CO, Jakarta - Bank Indonesia (BI) stated that foreign investors have responded positively to the benchmark interest rate hike to 5.50 percent and the strengthening yields of rupiah investment instruments. Head of the BI Communication Department, Ramdan Denny Prakoso, noted a visible uptick in foreign capital flowing into Bank Indonesia Rupiah Securities (SRBI) and State Bonds (SBN).
"This is reflected in the surge of foreign capital inflows into SRBI instruments following the SRBI auction on June 10, 2026," Denny said in a written statement on Friday, June 12, 2026.
He also pointed out that foreign portfolio investment has begun flowing back into the SBN market, particularly targeting short- and medium-term tenors.
In line with these market dynamics, Denny observed that the rupiah exchange rate against the US dollar continues to rally, clawing its way back below Rp18,000 per US dollar. He emphasized that BI will stay vigilant in monitoring global and domestic financial market developments while maintaining the allure of domestic financial assets to sustain foreign capital inflows.
The rupiah exchange rate experienced brief rallies on Tuesday, June 9, and Wednesday, June 10, 2026. On Wednesday, June 10, 2026, the local currency closed 114 points stronger at Rp17,944 per US dollar. However, the rupiah slightly buckled the following day, weakening back to the level of Rp17,988 per US dollar on Thursday, June 11, 2026.
Dean of the Faculty of Economics and Business at Airlangga University, Rahma Gafmi, suggested that Bank Indonesia's decision to raise interest rates outside of the regular Monthly Board of Governors Meeting could serve as an effective shock therapy to stabilize the volatile forex market.
"However, if the recent weakening of the rupiah was primarily triggered by fundamental external factors, such as broad US dollar strength or escalating geopolitical tensions, this 25-basis-point hike risks being merely a temporary stop at the expense of domestic economic growth," Rahma told Tempo.
Mutia Yuantisya contributed to this article
Read: Rupiah Strengthens to Rp17,944: What Factors Drive the Recovery?
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