The Indonesian Central Bank (BI) has hinted at conducting aggressive market intervention to stabilize the rupiah exchange rate which was depressed during the long IdulFitri holiday. 

The intervention will be carried out in various financial market lines starting on Tuesday, April 8, 2025, along with the reopening of operational activities after 11 days of holiday.

"Pressure on the rupiah exchange rate has occurred in the off-shore market (NDF) amidst the long domestic market holiday for Idul Fitri 1446 H," BI Spokesman, Ramdan Denny Prakoso, said in a media statement on Monday, April 7, 2025.

During the period from March 28 to April 7, 2025, BI closed all operational activities including rupiah monetary operations and foreign exchange, along with the national holiday and joint leave for IdulFitri.

The pressure on the rupiah occurred amid global tensions, especially after the reciprocal tariff policy was announced by the United States on April 2, followed by retaliation from China two days later.

Trade tensions between the world's two largest economies have triggered turmoil in global financial markets, including increased capital outflows from developing countries and pressure on their currencies.

In response, BI emphasized that it will continuously intervene in the foreign exchange market, including in the Asian, European, and New York markets. Domestically, BI will directly enter the spot foreign exchange market and the domestic NDF market on the first day of market opening, as well as purchase Government Securities (SBN) on the secondary market.

"BI will also optimize rupiah liquidity instruments to ensure sufficient liquidity in the domestic money and banking markets," Denny said.

Prediction

The rupiah exchange rate is predicted to weaken significantly and penetrate the level of Rp17,050 per US dollar in today's trading, April 8, 2025, after the Idul Fitri1446 Hijri holiday. The weakening of the rupiah was triggered by global sentiment, especially the import tariff policy announced by United States President Donald Trump.

In the Non-Deliverable Forward (NDF) market, the rupiah exchange rate had penetrated Rp17,000 per U.S. dollar. This weakening occurred due to Trump's announcement regarding the imposition of import tariffs on a number of countries, including Indonesia.

Bloomberg data noted that the rupiah last closed at Rp16,562 per U.S. dollar on March 27, 2025, ahead of the long Idul Fitri holiday. Throughout the first quarter of 2025, the rupiah has depreciated by 2.25 percent, with the lowest level recorded on March 25 at Rp16,612 per U.S. dollar.

The blow was even deeper after the official announcement from the White House. The rupiah NDF contract on the overseas market was recorded at Rp17,006 per U.S. dollar on Friday, April 4, 2025 at 20:53 Jakarta Time.

Market are currently observing the direction of Bank Indonesia's monetary policy in responding to global turmoil that could worsen pressure on the rupiah. The market is also waiting for signals from the fiscal authorities regarding the stabilization strategy amid the threat of a re-heating trade war.