Indonesia reports US$146.8 billion in reserves as rupiah faces pressure

Bank Indonesia (BI) reported foreign exchange reserves of US$146.8 billion at the end of October 2026 as the rupiah faced pressure from growing expectations of higher US interest rates.

The central bank said the rupiah had depreciated by 0.11 per cent on a monthly basis, a movement it described as consistent with currencies elsewhere in the region.

BI's head of the Monetary and Securities Asset Management Department, Erwin Gunawan Hutapea, linked the currency pressure to shifting expectations for Federal Reserve policy. Markets increasingly expected possible rate rises in December 2026 and throughout 2027 after US inflation exceeded forecasts.

Those expectations lifted the dollar and US Treasury yields, putting pressure on capital outflows from emerging economies, he said. The US dollar index rose to 102.96, a level last reached in March 2025.

BI also cited concerns about a potential downgrade of Indonesia's capital-market classification by Morgan Stanley Capital International (MSCI), domestic economic developments and greater foreign-currency demand ahead of year-end.

To stabilise the exchange rate, BI said it continued offshore intervention using Non-Deliverable Forward (NDF) transactions, alongside Domestic Non-Deliverable Forward (DNDF) and spot transactions at home. It also purchased government securities on the secondary market as part of its efforts to maintain financial-market stability.