Redam Gejolak Pasar dan Rupiah, Efek Kebijakan Moneter Diuji
Table of Contents
- Navigating Interest Rate Cuts Amidst Rupiah Volatility
- Indonesia’s Economic Balancing Act: SRBI, SBN, and Fiscal Stability
- Indonesia’s Monetary Policy Aims for Stability Amid Global Uncertainty
- Navigating Liquidity: Balancing Act for Economic stability
- indonesia’s Economic Outlook: Maintaining Stability Amidst Global Uncertainty
Assessing the room for interest rate cuts requires careful consideration of the rupiah’s exchange rate movements, inflation, and economic growth.
the decision by Bank Indonesia (BI) to maintain its benchmark interest rate is viewed as a strategic move to preserve economic stability. However, its effectiveness in curbing the rupiah’s depreciation, which has touched Rp 16,500 per dollar, remains to be seen.
According to Rizal Taufiqurrahman, Head of the Macroeconomics Center at the institute for development of Economics and Finance (Indef), “Kebijakan ini memang dapat memberikan kepastian bagi pasar keuangan domestik. namun, dengan dinamika global yang terus berubah, Indonesia tetap rentan terhadap arus modal keluar. Jika BI terlalu pasif dalam merespons tekanan eksternal, nilai tukar rupiah bisa terus tertekan, melemahkan daya beli masyarakat dan meningkatkan beban impor.”
Infografik Strategi pengendalian Nilai Tukar rupiah
from early March to March 17, 2025, foreign capital outflows in the stock market amounted to $0.3 billion. Conversely, foreign capital inflows into Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) were $0.2 billion and $0.1 billion, respectively.
Consequently, portfolio investments in the domestic financial market recorded a net buy of $0.8 billion by foreign investors since the beginning of the year until March 17,2025.this was primarily supported by foreign investor inflows in the SBN and SRBI markets.
Perlu dicermati bahwa pada periode trump periode pertama pada 2016-2019 atau Trump 1.0, rupiah melemah sekitar 6 persen terhadap dollar AS. Otoritas perlu memberikan insentif yang menarik untuk mempertahankan minat investor asing agar aliran modal tetap terjaga di tengah dinamika global saat ini.
Based on Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor) data, the rupiah closed at Rp 16,528 per dollar on Wednesday, March 19, 2025. Even though relatively stable recently, the rupiah has depreciated by 2.29 percent compared to the end of 2024.
Rizal added that interest rate policies should be combined with more proactive market interventions. Clear dialog is also necessary to maintain investor confidence in the rupiah’s stability.
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Economist Hosianna Evalita Situmorang from Bank Danamon Indonesia believes that BI’s move to hold the benchmark interest rate will help maintain financial sector stability. Still, the rupiah remains vulnerable to external pressures.
Hosianna Evalita Situmorang stated, “Perlu dicermati bahwa pada periode trump pertama pada 2016-2019 atau Trump 1.0, rupiah melemah sekitar 6 persen terhadap dollar AS. Otoritas perlu memberikan insentif yang menarik untuk mempertahankan minat investor asing agar aliran modal tetap terjaga di tengah dinamika global saat ini.”
The domestic benchmark interest rate differential remains attractive compared to the US Federal Reserve (The Fed), which is expected to cut its benchmark interest rate onyl onc in 2025.In 2025, the rupiah is projected to move within the range of Rp 16,000-16,600 per dollar.
Liquidity Expansion
In addition to maintaining the benchmark interest rate, BI will also pursue liquidity expansion for market intervention purposes in line with monetary policy direction. This includes purchasing government SBNs in the secondary market and in the primary market for short-term tenor SBNs or Treasury Bills (SPN).
As of March 18, 2025, BI’s SBN purchases totaled Rp 70.7 trillion, consisting of Rp 47.3 trillion in long-term SBNs in the secondary market and Rp 23.4 trillion in short-term SBNs in the primary market.
According to data from the Directorate General of Financing and Risk Management (DJPPR) at the Ministry of Finance, BI’s SBN ownership portion as of March 18, 2025, was Rp 1,588.26 trillion, representing 25.59 percent of the total SBNs issued by the government.
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According to Rizal, BI’s move to expand liquidity by purchasing sbns is intended to stabilize the financial markets and maintain investor confidence.
Indonesia’s Economic Balancing Act: SRBI, SBN, and Fiscal Stability
Indonesia faces a complex economic landscape where the attractiveness of Bank Indonesia’s (BI) monetary instruments, such as Sekuritas Rupiah Bank Indonesia (SRBI), compared to government bonds (SBN) could divert funds meant for fiscal financing. This diversion may lead to a crowding out effect, diminishing the government’s fiscal space and hindering credit distribution to the private sector.
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Josua Pardede, Kepala Ekonom Bank Permata, noted that while BI’s liquidity expansion aims to maintain market liquidity and support the national economy amid market turbulence, it also carries inherent risks in the current volatile environment.
According to Josua Pardede, “Langkah ini (ekspansi likuiditas) dapat meningkatkan ekspektasi inflasi atau memperbesar tekanan pelemahan pada rupiah apabila pelaku pasar khawatir terhadap potensi meningkatnya suplai uang,” he stated, highlighting concerns about potential inflationary pressures and rupiah depreciation due to increased money supply.
The optimization of SRBI, designed to attract foreign funds and investors to the domestic financial market, also presents risks. Despite an increase in foreign ownership to Rp 232.4 trillion, representing approximately 26.1 percent of SRBI ownership, its concurrent use with SBN purchases could result in a crowding out effect.
Ke depannya, penting bagi BI untuk secara hati-hati menyeimbangkan langkah-langkah kebijakan ini, guna memastikan stabilitas nilai tukar rupiah, menjaga kepercayaan pasar, serta mencegah dampak negatif dari intervensi likuiditas yang berlebihan terhadap perekonomian domestik.
This implies that SRBI and SBN are competing to attract both domestic and foreign investors. If risk perceptions continue to rise,demand for SBN may decline,potentially leading to higher government bond yields in the future and limiting fiscal space.
Josua Pardede emphasized, “Ke depannya, penting bagi BI untuk secara hati-hati menyeimbangkan langkah-langkah kebijakan ini guna memastikan stabilitas nilai tukar rupiah, menjaga kepercayaan pasar, serta mencegah dampak negatif dari intervensi likuiditas yang berlebihan terhadap perekonomian domestik.”
Maintaining Market sentiment
Gubernur BI Perry Warjiyo stated that the benchmark interest rate remains at 5.75 percent to keep inflation within the target range of 1.5-3.5 percent. This measure also aims to maintain the rupiah’s stability,aligning with its fundamental value amid persistent global uncertainty.
Perry Warjiyo mentioned in the RDG BI press conference in March 2025, “Pada saat seperti ini, langkah BI terus melakukan intervensi karena mestinya tidak hanya stabil, justru cenderung menguat, mengingat fundamental kita baik,” indicating BI’s continuous intervention to ensure the rupiah’s stability and potential strengthening, supported by strong fundamentals.
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The fundamental value of the rupiah is reflected in the consistently high domestic economic growth of around 5 percent,controlled inflation within the target range,a low balance of payments deficit,and attractive financial asset yields.
BI projects domestic economic growth to range between 4.7-5.5 percent in 2025. The Indonesia Balance of Payments deficit is expected to remain healthy, supported by a continued surplus in capital and financial transactions, driven by attractive investment returns, and a current account deficit maintained within 0.5-1.3 percent of the Gross Domestic Product (GDP).
Perry stated, ”Kami pastikan aset keuangan di Indonesia, khususnya SBN dan SRBI, tetap akan menarik bagi investor asing untuk berinvestasi di Indonesia. Menariknya, imbal hasilnya kami pastikan tetap kompetitif dengan negara *emerging*,” ensuring that Indonesian financial assets, particularly SBN and SRBI, remain attractive to foreign investors with competitive returns compared to other emerging markets.
As of March 18, 2025, the yield on 10-year SBN increased to 7 percent, while the 2-year SBN yield decreased to 6.51 percent. On March 14, 2025, the SRBI interest rates were 6.32 percent for the 6-month tenor, 6.37 percent for the 9-month tenor, and 6.4 percent for the 12-month tenor.
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Indonesia’s Monetary Policy Aims for Stability Amid Global Uncertainty
JAKARTA – In response to recent market volatility triggered by foreign investor sell-offs, Indonesia’s monetary policy is strategically focused on maintaining stability and market confidence. The decision by Bank Indonesia (BI) to hold its benchmark interest rate at 5.75 percent is seen as a critical move, though its effectiveness in stabilizing the rupiah will be closely monitored.
The domestic stock market experienced a notable correction, with the Composite Stock Price Index (IHSG) falling to 6,011.84, its lowest level since 2021. Trading was temporarily halted during the opening session on Tuesday, March 18, 2025.
On Wednesday, March 19, 2025, following its March 18-19 meeting, the BI Board of Governors decided to keep the benchmark interest rate unchanged at 5.75 percent. Looking ahead, BI will continue to assess the possibility of lowering interest rates, taking into account the rupiah’s exchange rate, inflation, and economic growth.
Strategic Moves and Market Reactions
Rizal Taufiqurrahman, Head of the Macroeconomics Center at the Institute for Development of Economics and Finance (Indef), stated that BI’s decision to maintain the benchmark interest rate is a strategic step to ensure economic stability. However, he emphasized that its success in mitigating the rupiah’s depreciation, which has reached Rp 16,500 per US dollar, remains to be seen.
According to Rizal, “Kebijakan ini memang dapat memberikan kepastian bagi pasar keuangan domestik.Namun, dengan dinamika global yang terus berubah, Indonesia tetap rentan terhadap arus modal keluar. Jika BI terlalu pasif dalam merespons tekanan eksternal,nilai tukar rupiah bisa terus tertekan,melemahkan daya beli masyarakat dan meningkatkan beban impor,” (This policy can indeed provide certainty for the domestic financial market. Though, with constantly changing global dynamics, Indonesia remains vulnerable to capital outflows. If BI is too passive in responding to external pressures, the rupiah exchange rate could continue to be under pressure, weakening people’s purchasing power and increasing import burdens.)
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From the beginning of March to March 17,2025,foreign capital outflows from the stock market amounted to US$0.3 billion. Conversely,foreign capital inflows into Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) were US$0.2 billion and US$0.1 billion, respectively.
portfolio investments in the domestic financial market recorded a net purchase by foreign investors of US$0.8 billion from the beginning of the year to March 17, 2025. This was mainly supported by foreign investor inflows into the SBN market and SRBI instruments.
perlu dicermati bahwa pada periode Trump periode pertama pada 2016-2019 atau Trump 1.0, rupiah melemah sekitar 6 persen terhadap dollar AS. Otoritas perlu memberikan insentif yang menarik untuk mempertahankan minat investor asing agar aliran modal tetap terjaga di tengah dinamika global saat ini.
According to Bank indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor), the rupiah closed at Rp 16,528 per US dollar on Wednesday, March 19, 2025. While relatively stable recently, the rupiah has depreciated by 2.29 percent compared to the end of 2024.
Rizal added that interest rate policy should be combined with more proactive market intervention. clear communication is also necessary to maintain investor confidence in the rupiah’s stability.
Hosianna Evalita Situmorang, an economist at Bank Danamon Indonesia, believes that BI’s decision to hold the benchmark interest rate will help maintain financial sector stability. Though, she noted that the rupiah remains vulnerable to external pressures.
Hosianna stated, “Perlu dicermati bahwa pada periode Trump pertama pada 2016-2019 atau Trump 1.0, rupiah melemah sekitar 6 persen terhadap dollar AS. Otoritas perlu memberikan insentif yang menarik untuk mempertahankan minat investor asing agar aliran modal tetap terjaga di tengah dinamika global saat ini,” (It should be noted that during Trump’s first term from 2016-2019 or Trump 1.0, the rupiah weakened by about 6 percent against the US dollar. Authorities need to provide attractive incentives to maintain foreign investors’ interest so that capital flows are maintained amidst the current global dynamics.)
The difference between the domestic benchmark interest rate and that of the US Federal Reserve (The Fed) remains attractive.The Fed is expected to cut its benchmark interest rate only once in 2025. In 2025,the rupiah exchange rate is projected to fluctuate between rp 16,000 and Rp 16,600 per US dollar.
Liquidity Expansion
in addition to maintaining the benchmark interest rate, BI will also pursue liquidity expansion for market intervention purposes, in line with monetary policy direction. This will include purchasing government bonds (SBN) in the secondary market and in the primary market for short-term SBNs or Treasury Bills (SPN).
As of March 18, 2025, BI’s SBN purchases totaled rp 70.7 trillion, consisting of long-term SBNs in the market.
Destry said, ”Yang kita harapkan apa yang terjadi kemarin itu sifatnya temporary karena shock dengan kebijakan-kebijakan yang ada di global. Lalu, BI akan terus berada di market dan dalam beberapa hari ini juga terus menunjukkan kepada market bahwa koreksi rupiah ini diharapkan temporary,” (What we hope is that what happened yesterday is temporary because of the shock of the policies in the global. Then, BI will continue to be in the market and in the next few days will also continue to show the market that the rupiah correction is expected to be temporary.)
Central bank actions to boost liquidity through sovereign bond (SBN) purchases in the secondary market aim to stabilize bond markets and lower borrowing costs. However, these policies also introduce potential risks that require careful consideration.
Rizal suggests that aggressive liquidity expansion, without considering inflation and exchange rates, could trigger macroeconomic imbalances.Moreover, increased demand for SBN due to central bank intervention might limit private sector access to funding, potentially hindering real sector growth.
The central bank is also optimizing Securities for Rupiah Intervention (SRBI) as a liquidity management tool to attract foreign capital and strengthen the rupiah. Though, this policy risks shifting investor preferences from SBN to SRBI.
If SRBI offers more attractive returns then SBN,funds intended for government fiscal financing could be diverted to central bank monetary instruments. This could lead to crowding out, reducing the government’s fiscal space and hindering credit disbursement to the private sector.
Josua Pardede, Chief Economist at Bank Permata, adds that liquidity expansion by the central bank aims to maintain market liquidity and support the national economy amid market volatility. However, in the current volatile market conditions, liquidity expansion carries inherent risks.
According to Josua Pardede, “Langkah ini (ekspansi likuiditas) dapat meningkatkan ekspektasi inflasi atau memperbesar tekanan pelemahan pada rupiah apabila pelaku pasar khawatir terhadap potensi meningkatnya suplai uang,”
Additionally, optimizing SRBI to attract foreign funds to the domestic financial market also poses risks. While foreign ownership has increased to Rp 232.4 trillion, or about 26.1 percent of SRBI ownership, its simultaneous use with SBN purchases could create a crowding out effect.
Ke depannya, penting bagi BI untuk secara hati-hati menyeimbangkan langkah-langkah kebijakan ini, guna memastikan stabilitas nilai tukar rupiah, menjaga kepercayaan pasar, serta mencegah dampak negatif dari intervensi likuiditas yang berlebihan terhadap perekonomian domestik.
This means SRBI and SBN compete for the interest of both domestic and foreign investors. If risk perception continues to rise, demand for SBN could be suppressed, potentially leading to higher government bond yields in the future and limiting fiscal space.
Josua Pardede stated, “Ke depannya, penting bagi BI untuk secara hati-hati menyeimbangkan langkah-langkah kebijakan ini guna memastikan stabilitas nilai tukar rupiah, menjaga kepercayaan pasar, serta mencegah dampak negatif dari intervensi likuiditas yang berlebihan terhadap perekonomian domestik.”
Maintaining Sentiment
Bank indonesia Governor Perry Warjiyo stated that the policy rate was maintained at 5.75 percent to keep inflation within the 1.5-3.5 percent target range. This step also aims to maintain rupiah stability in line with its fundamental value amid persistent global uncertainty.
Perry Warjiyo mentioned, “Pada saat seperti ini, langkah BI terus melakukan intervensi karena mestinya tidak hanya stabil, justru cenderung menguat, mengingat fundamental kita baik,” during a press conference on the results of the BI Board of Governors Meeting in March 2025, in Jakarta.
The fundamental value of the rupiah is reflected in the persistently high domestic economic growth of around 5 percent and inflation being kept within the target range. Additionally, the balance of payments deficit remains low, and financial asset returns are attractive.
BI projects domestic economic growth in 2025 to be in the range of 4.7-5.5 percent. The Indonesian Balance of Payments deficit in 2025 is expected to remain healthy,supported by continued capital and financial account surpluses due to attractive investment returns and a current account deficit maintained within 0.5-1.3 percent of gross domestic product (GDP).
Perry stated, “Kami pastikan aset keuangan di Indonesia, khususnya SBN dan SRBI, tetap akan menarik bagi investor asing untuk berinvestasi di Indonesia. Menariknya, imbal hasilnya kami pastikan tetap kompetitif dengan negara *emerging*,”
As of March 18, 2025, the yield on 10-year SBN increased to 7 percent, while the 2-year SBN yield decreased to 6 percent.
indonesia’s Economic Outlook: Maintaining Stability Amidst Global Uncertainty
Published:
Strategic Measures to Ensure Economic Resilience
Indonesia is actively implementing strategies to maintain economic stability and investor confidence amidst global economic fluctuations. Key to this approach is managing interest rates and ensuring an attractive return for investors.
Interest Rate Adjustments and SRBI
As of March 14, 2025, the interest rate on Bank Indonesia Rupiah Securities (SRBI) stood at 6.21 percent. Further details include:
- SRBI tenor 6 months: 6.32 percent
- SRBI tenor 9 months: 6.37 percent
- SRBI tenor 12 months: 6.4 percent
Visualizing Indonesia’s Balance of Payments
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Maintaining Rupiah Stability and Attractive investment Instruments
Bank Indonesia (BI) is committed to ensuring the stability of the rupiah exchange rate, which is crucial for maintaining attractive returns for investors. This is supported by financial instruments such as Sekuritas Valas Bank Indonesia (SVBI) and Sukuk Valas Bank Indonesia (SUKBI), designed to appeal to a broad range of investors.
Expert Insights on Currency Movements
Destry damayanti, Deputi Gubernur Senior BI, noted the relative stability of the rupiah compared to the stock market amidst global uncertainties. She highlighted that stock market movements from late 2024 to early 2025 were influenced by both global and domestic sentiments, particularly the impact of US tariff policies.
”Yang kita harapkan apa yang terjadi kemarin itu sifatnya temporary karena shock dengan kebijakan-kebijakan yang ada di global. Lalu,BI akan terus berada di market dan dalam beberapa hari ini juga terus menunjukkan kepada market bahwa koreksi rupiah ini diharapkan temporary,”
destry Damayanti,Deputi Gubernur Senior BI
Damayanti emphasized the expectation that recent market shocks are temporary and that BI will continue to actively engage in the market to reinforce the temporary nature of the rupiah’s correction.
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Okay, hear’s a breakdown of the article with a focus on identifying the main arguments, key points, and the flow of data, along with some potential areas for critique:
I.Overall Summary:
The article discusses Indonesia’s monetary policy in the face of global economic uncertainty and recent market volatility. It focuses on Bank Indonesia’s (BI) decision to maintain its benchmark interest rate at 5.75% and its strategies to stabilize the rupiah and maintain investor confidence. The article incorporates insights from several economists to assess the effectiveness of BI’s policies. It also addresses the potential risks and challenges associated with liquidity expansion and the use of instruments like SRBI.
II. Key Arguments and Points:
Maintaining Stability is Paramount: BI prioritizes economic stability by holding the benchmark interest rate steady. This is seen as a strategic move to provide certainty in the domestic financial market.
Rupiah Vulnerability: The article acknowledges that the rupiah remains vulnerable to external pressures, particularly capital outflows driven by global economic dynamics and potential shifts in U.S. monetary policy (mentioning a potential Trump presidency).
The Need for Proactive Market Intervention: Experts suggest that simply maintaining the interest rate may not be sufficient.BI needs to be more proactive in market intervention and improve dialogue to maintain investor confidence.
Liquidity Expansion – A Double-Edged Sword: BI’s liquidity expansion strategy, while intended to support the economy, carries inherent risks such as inflationary pressures and rupiah depreciation if market participants become concerned about increased money supply.
SRBI and SBN – Potential for Crowding Out: The use of SRBI to attract foreign funds, alongside SBN purchases, could lead to a “crowding out effect,” possibly increasing government bond yields and limiting fiscal space.
Strong Fundamentals as an Anchor: BI emphasizes the country’s strong economic fundamentals (growth,inflation,balance of payments) as a basis for the rupiah’s stability and attractiveness to foreign investors.
Competitive Returns are Key: BI aims to ensure that Indonesian financial assets, particularly SBN and SRBI, offer competitive returns compared to other emerging markets.
Indonesia remains attractive for investment: Foreign capital continues to flow in SBN and SRBI
III. Structure and Flow of Information:
- Introduction: Sets the context by discussing market volatility and BI’s strategic focus.
- Benchmark Interest Rate Decision: Explains BI’s decision to hold the interest rate and provides expert commentary on its potential impact.
- Market Reactions and Capital Flows: Details recent market trends, capital outflows in the stock market, and inflows into SBN and SRBI.
- Rupiah Performance: Discusses the current rupiah exchange rate and its depreciation compared to the previous year.
- Expert Opinions and Recommendations: Presents views from economists on the need for proactive intervention and attractive incentives for foreign investors. Mentions the potential impact of a future Trump presidency.
- Liquidity Expansion and Risks: Addresses BI’s liquidity expansion strategy and its potential downsides, including concerns about inflation and rupiah depreciation.
- SRBI and SBN: Discusses the use of SRBI to attract foreign funds but highlights the potential for a “crowding out effect.”
- Maintaining Market Sentiment: Explains BI’s efforts to maintain market confidence by highlighting strong economic fundamentals and competitive returns on Indonesian assets.
- Conclusion: Re-emphasizes maintaining strong domestic assets.
IV. Potential Areas for Critique:
Depth of Analysis: While the article covers various aspects of Indonesian monetary policy, it could benefit from a deeper analysis of the quantitative impact of each strategy.For example, how much liquidity expansion is planned, and what specific mechanisms are being used?
Contradictory views: Contradictory viewpoints were presented, such as the positive impact of SRBI versus the potential for crowding out SBN. The article could dive further into how Indonesian policy may attempt to find a middle ground,or strategies that could be implemented to mitigate such issues.
Causation vs. Correlation: When discussing the relationship between a Trump presidency and rupiah depreciation, the article mentions correlation but needs to provide more causal links. Is it simply uncertainty that causes depreciation,or are there specific policies under a Trump administration that are anticipated to negatively impact the rupiah?
Reliance on Expert Opinions: While expert opinions add value,the article relies heavily on them. More data-driven analysis and concrete examples of BI’s actions would strengthen the narrative.
Clarity on SRBI: The article mentions SRBI multiple times but could explain in more detail how this actually functions, as it is a less common instrument than SBN and a better understanding would be beneficial for the reader.
Future Outlook: The article makes some projections about economic growth and exchange rates. It could be strengthened with scenarios of key factors that could lead to different outcomes.
In summary: The article provides a extensive overview of Indonesia’s monetary policy response to global economic uncertainty. It effectively integrates expert opinions and highlights the key challenges and risks involved. The biggest area for advancement would be more in-depth quantitative analysis and a more critical evaluation of the potential impacts of different policy choices.