Indonesian Rupiah to Strengthen to IDR 17,300-17,800 per USD in 2027: Bank Indonesia

Bank Indonesia (BI) projects that the Indonesian Rupiah will strengthen to a range of IDR 17,300 to IDR 17,800 per US dollar by 2027. This strengthening is expected to be driven by a recovering global economy, robust domestic economic fundamentals, and increased capital inflows into the Indonesian market. BI Governor Destry Damayanti stated that five main factors will support the Rupiah's appreciation in 2027: improvements in the global economy, the strengthening of Indonesia's economic fundamentals, the implementation of export proceeds (DHE) policies, BI's stabilization policies, and enhanced coordination between fiscal and monetary authorities. According to Damayanti, the global economy is projected to grow by 3.3% in 2027, an increase from the 3% growth forecast for 2026. This improvement is expected to reduce geopolitical risks and encourage capital to flow back into emerging market economies. BI also anticipates that Indonesia's economic fundamentals will become even stronger by 2027. Higher economic growth, inflation remaining within the target range of 2.5% ± 1%, a healthy balance of payments, and attractive investment returns will bolster the appeal of Indonesian assets. The implementation of the export proceeds policy for natural resources (DHE SDA) is identified as a key pillar supporting the Rupiah's strength. This policy is expected to increase foreign exchange earnings, strengthen foreign exchange reserves, and support the stability of the exchange rate. BI will maintain its foreign exchange interventions through NDF, spot, and DNDF markets to preserve Rupiah stability. The central bank will also utilize interest rate policies, hedging instruments, and the deepening of money and foreign exchange markets to mitigate exchange rate pressures. As of August 31, 2026, the Rupiah was trading at IDR 17,715 per US dollar, an appreciation of 1.57% from its position of IDR 17,994 at the end of July 2026. Furthermore, coordination between fiscal and monetary policies will be directed towards maintaining macroeconomic stability and enhancing investment attractiveness. This is expected to strengthen foreign capital inflows and ensure adequate liquidity in the financial markets. BI recorded foreign exchange reserves of US$145.3 billion at the end of July 2026. This position is equivalent to financing approximately 5.3 months of imports and the government's external debt payments. Damayanti believes that the combination of strong domestic fundamentals, effective foreign exchange management policies, and BI's stabilization efforts will provide room for the Rupiah to strengthen further in 2027. Source: Liputan6