Bank Indonesia (BI) has once again addressed the persistent weakening of the rupiah exchange rate against the US dollar. According to Bloomberg data, the rupiah briefly fell to Rp 17,893 per US dollar on Friday (May 29) before recovering to strengthen 0.20 percent, reaching Rp 17,880 by 4:10 PM Western Indonesian Time (WIB).
Ramdan Denny Prakoso, Head of BI’s Communications Department, clarified that the pressure on the rupiah’s value is primarily influenced by ongoing global uncertainties, particularly the protracted conflict in the Middle East. Furthermore, there’s a seasonal surge in demand for foreign currency (forex) driven by factors such as external debt payments and dividend repatriations, occurring amidst a limited inflow of US dollars into the market.
Prakoso reiterated Bank Indonesia’s unwavering commitment to maintaining the stability of the rupiah exchange rate. He emphasized BI’s continuous presence in the market, operating “around the world, around the clock” to uphold this stability.
“This commitment is materialized through optimizing forex market interventions, utilizing Non-Deliverable Forward (NDF) transactions in the offshore market, spot transactions and Domestic Non-Deliverable Forward (DNDF) in the domestic market, alongside consistent and measured purchases of government securities (SBN) in the secondary market,” Ramdan stated in an official release on Friday (May 29).
Beyond direct interventions, Bank Indonesia is also actively strengthening the effectiveness of its monetary policy mix. This includes enhancing the pro-market interest rate structure of monetary instruments. These strategic adjustments aim to bolster the attractiveness of domestic financial assets, thereby supporting a crucial inflow of foreign capital.
Addressing the demand side for US dollars, Ramdan announced that BI has set a new cash threshold for forex purchases against the rupiah without underlying transactions. This threshold will be USD 25,000 per participant per month, effective June 2026.
“Bank Indonesia continues to strengthen coordination with relevant authorities to support the stability of both the financial market and the exchange rate. This includes enhancing supervision over banks and corporations exhibiting high US dollar purchase activities,” Ramdan added, highlighting a proactive approach to market oversight.
Ramdan further underscored BI’s dedication to continuously monitoring both global and domestic financial market developments and remaining a vigilant presence in the market.
“Bank Indonesia will persist in observing global and domestic financial market developments and will always be present in the market, taking necessary steps consistently and measurably to maintain rupiah exchange rate stability and support the external resilience of the Indonesian economy,” Ramdan concluded, affirming BI’s comprehensive strategy for economic stability.
Summary
The Indonesian rupiah recently experienced pressure, reaching a low of 17,893 against the US dollar before seeing a slight recovery. Bank Indonesia attributes this depreciation to global geopolitical tensions, particularly in the Middle East, alongside seasonal increases in foreign currency demand for debt payments and dividend repatriations.
To stabilize the currency, Bank Indonesia is actively intervening through forex market transactions and enhancing its monetary policy mix to attract foreign capital. Additionally, the central bank has introduced stricter oversight, including a new USD 25,000 monthly threshold for non-underlying forex purchases effective in June 2026, to ensure long-term economic resilience.