Indonesia's Central Bank Mandate and Exchange Rate Regime

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[...] - Since the end of the 1997 Asian crisis-In 1998, the authorities adopted an officially floating exchange rate regime: the exchange rate is determined by the market, but in fact, it is a managed float. In fact, the Central Bank regularly intervenes to limit excessive movements and preserve financial stability.Bank for International Settlements) - Central Bank Mandate: focused on the stability of the rupee, understood as both low and controlled inflation and contained exchange rate volatility. The recent history of the rupee illustrates a strong sensitivity to international shocks. [...]

[...] - This location makes Indonesia a true maritime crossroads, but forces the state to incur significant expenses for monitoring maritime spaces and securing navigation routes, particularly against the risks of piracy and illicit trafficking. Presentation socio-demographic of Indonesia - More than 280 million inhabitants in 2025, fourth most populous country in the world and first in Southeast Asia-Est - A relatively high average density, but it masks strong disparities (Java represents only a fraction of the territory but concentrates more than half of the population and wealth) - The demographic growth, of the order of per year, remains dynamic, even if the decline in fertility marks the country's entry into an advanced demographic transition.DataBank) - The census data shows a share of around 23% of people under 15 years old, more than 70% of adults, and barely of elderly people, which corresponds to a pyramid of ages still wide at the base, but which tends to 'rectangularize' as life expectancy increases.Wikipedia) This profile offers an important 'demographic dividend', provided that the labor market is able to absorb these cohorts of active young people and offer them stable and qualified jobs. [...]

[...] Country Risk Analysis - Indonesia: Semiology Geographic Presentation of Indonesia - Vast archipelagic state of South Asia-EN: With approximately 1.9 million square kilometers of land, over 17,000 islands, and more than 280 million inhabitants, making it the fourth most populous country in the world according to recent data from the World Bank.DataBank) - This spatial fragmentation of the territory into a multitude of small, sparsely populated islands creates an extremely vast and dispersed territory, stretching over more than 5,000 kilometers from west to east, which further complicates national cohesion and the servicing of peripheral regions. Located between the Indian Ocean and the Pacific Ocean, straddling the equator, Indonesia occupies a pivotal position between the Asian continent and Australia. The major straits that traverse it - Malacca, Sunda, Lombok - are key passages for a significant part of global trade and the transport of oil or gas to China, Japan, or Korea. [...]

[...] The 1997 Asian crisis-In 1998 it caused a spectacular collapse of the exchange rate, the currency falling from around 2,400 rupees per dollar to nearly 16,000, with major social and political consequences.NBER) Following this, the 2013 'taper tantrum' and the 2018 financial turbulence have again depreciated the currency, that-falling back to around 15,000 rupees per dollar in the fall of 2018.Oxford Business Group) The Covid crisis-In 2020, this translated to a further weakening, the rupee briefly exceeding 16,000 for a dollar before recovering with the return of capital to emerging markets.journal.afebi.org) In 2024-In 2025 again, the currency briefly approached its lowest levels since the Asian crisis, crossing the threshold of 16,000 rupees for a dollar and forcing the central bank to combine 'aggressive' currency interventions and interest rate adjustments to curb depreciation and reassure markets.Reuters) - Currency structurally volatile, whose credibility rests as much on the solidity of macroeconomic fundamentals as on the central bank's ability to react quickly to external shocks. [...]