Rupiah Undervalued, BI Steps Up Intervention

JAKARTA, Investortrust.id — The rupiah is undervalued despite weakening to Rp 16,880 per US dollar on Wednesday, Feb 18, 2026 in Jakarta due to global financial uncertainty and high corporate foreign exchange demand, Bank Indonesia Governor Perry Warjiyo said on Thursday, Feb 19, 2026, signaling intensified intervention to stabilize the currency. The central bank believes the exchange rate will stabilize and strengthen in line with Indonesia's low inflation, attractive yields, and solid growth outlook.

Perry said the rupiah depreciated 0.56 percent point to point compared with end-January levels, mainly driven by heightened global risk premiums and technical factors. He emphasized that the currency did not reflect domestic economic fundamentals.

"The rupiah has been assessed as undervalued relative to Indonesia's economic fundamentals," Perry said during the February 2026 Board of Governors Meeting press briefing held virtually on Thursday.

He said strong fundamentals including controlled inflation, improving growth prospects, and competitive yields supported a firmer exchange rate over the medium term.

"All indicators show the rupiah should be stable and tending to strengthen," he said.

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Intervention Intensified

Bank Indonesia increased the intensity of interventions in offshore Non Deliverable Forward markets as well as in the domestic spot and Domestic Non Deliverable Forward markets. The move aimed to curb short term volatility triggered by global market turbulence.

"Bank Indonesia's response is to step up intervention both in offshore NDF markets and in the domestic market to ensure stability," Perry said.

The central bank remained confident that stabilization measures would guide the rupiah back toward levels consistent with fundamentals.

Earlier this month, Bank Indonesia reported that foreign exchange reserves declined to US$154.6 billion at the end of January 2026 from US$156.5 billion in December 2025.

The drop partly reflected government external debt payments and currency stabilization efforts amid rising global uncertainty.

Executive Director of the Communication Department, Ramdan Denny Prakoso, said the reserve position was equivalent to 6.3 months of imports or 6.1 months of imports and government external debt payments, well above the international adequacy standard of around three months of imports.

"This level of reserves is capable of supporting external sector resilience and maintaining macroeconomic and financial system stability," Denny said.

He added that capital inflows remained supportive as investors maintained positive perceptions of Indonesia's economic prospects and attractive investment returns.