Central Bank Sees Rupiah as Undervalued
The central bank of Indonesia remains confident that the Indonesian rupiah will stabilize and strengthen despite recent pressure from global markets.
Governor Perry Warjiyo said the rupiah is currently undervalued compared with Indonesia’s strong economic fundamentals like stable growth, low inflation, and good investment returns.
Indonesia’s foreign exchange reserves reached US$146.2 billion in April 2026.
The central bank acknowledged a small decline in reserves from debt payments and currency stabilization efforts, but insisted the level is still adequate to maintain market confidence.
The central bank of Indonesia has also continued intervening in currency markets and offering competitive interest rates to attract foreign investors.
Foreign Investment Begins Returning
Indonesia experienced foreign capital outflows of about 1.7 billion USD in the first quarter of 2026. However, conditions improved in April, with net foreign inflows reaching around 3.3 billion USD, mainly into government bonds and central bank securities.
The rupiah has been hit by global uncertainty, including geopolitical tensions and changing views on United States interest rates. Even so, Indonesian officials believe the country’s economy remains more resilient than many other emerging markets.
Indonesia’s economy continues to expand over 5 percent, while inflation remains relatively low. These conditions, combined with the central bank’s market intervention policies, are expected to support the rupiah in the coming months.
Analysts say global investor sentiment and future decisions by the U.S. Federal Reserve will continue to influence the rupiah’s performance throughout 2026.
Source: ANTARA News
Feat Image: ANTARA News
