Bank Indonesia (BI) has once again addressed the persistent weakening of the Rupiah against the US Dollar. According to Bloomberg data, the Indonesian currency briefly touched Rp 17,893 per US Dollar on Friday, May 29th, before staging a modest recovery of 0.20 percent to settle at Rp 17,880 by 4:10 PM Western Indonesian Time (WIB).
Ramdan Denny Prakoso, Head of BI’s Communication Department, attributed the prevailing pressure on the Rupiah exchange rate to several factors. Primarily, ongoing global uncertainty, exacerbated by the protracted conflict in the Middle East, continues to weigh on market sentiment. Domestically, there’s a seasonal increase in foreign exchange (forex) demand, largely driven by external debt repayments and dividend repatriations, occurring amidst a constrained inflow of US Dollars.
In response to these challenges, Bank Indonesia affirmed its steadfast commitment to maintaining Rupiah stability. Prakoso emphasized BI’s continuous presence in the market, asserting its readiness to act “around the world, around the clock” to uphold the currency’s value and manage volatility.
This unwavering commitment is translated into concrete actions through strategic optimization of forex market interventions. Ramdan detailed these measures, which include Non-Deliverable Forward (NDF) transactions in offshore markets, spot transactions, and Domestic Non-Deliverable Forward (DNDF) operations in the domestic market. Additionally, BI consistently and judiciously conducts purchases of Government Securities (SBN) in the secondary market, as stated by Prakoso in his official remarks on Friday, May 29th.
Beyond direct intervention, Bank Indonesia is also actively strengthening the effectiveness of its broader monetary policy mix. This involves reinforcing a pro-market structure for monetary instrument interest rates. The dual objective is to safeguard the attractiveness of domestic financial assets, thereby encouraging and supporting the inflow of foreign capital into Indonesia’s economy.
Addressing the demand side for the US Dollar, Ramdan further announced a new cash threshold for forex purchases against the Rupiah without underlying transactions. This limit has been set at USD 25,000 per participant per month, a policy slated to take effect in June 2026. This forward-looking measure aims to manage speculative demand and enhance market transparency.
Ramdan also highlighted BI’s continuous efforts to strengthen coordination with relevant authorities. This collaborative approach is crucial for supporting overall financial market stability and the exchange rate, notably through enhanced supervision of banks and corporations exhibiting high US Dollar purchasing activity. This targeted oversight ensures responsible forex transactions and mitigates potential risks.
Concluding his remarks, Ramdan underscored Bank Indonesia’s enduring vigilance. BI will persist in closely monitoring both global and domestic financial market developments, maintaining its active presence in the market. The central bank is prepared to take all necessary, consistent, and measured steps to uphold the Rupiah’s exchange rate stability and reinforce the external resilience of the Indonesian economy.
Summary
Bank Indonesia (BI) is taking proactive measures to address the weakening of the Rupiah, which recently reached 17,893 against the US Dollar. The depreciation is primarily driven by global uncertainties, Middle Eastern conflicts, and a seasonal increase in domestic demand for foreign exchange related to debt repayments and dividend repatriations.
To stabilize the currency, the central bank is utilizing strategic forex market interventions, including spot and derivative transactions, alongside a strengthened monetary policy mix. Additionally, BI will implement a USD 25,000 monthly cash threshold for non-underlying forex purchases starting in June 2026 to curb speculative demand and ensure long-term market stability.