JAKARTA — Bank Indonesia (BI) has reaffirmed its commitment to stabilizing the rupiah as the currency faces renewed pressure, prompting the central bank to tighten regulations on foreign exchange (forex) purchases.
Data from TradingView shows the rupiah weakened by 0.53% in offshore trading on Friday, May 22, 2026, settling at Rp17,879 per U.S. dollar. This depreciation occurred against the backdrop of the Eid al-Adha 1447 H holiday period.
Ramdan Denny Prakoso, Head of the BI Communication Department, attributed the sustained pressure on the rupiah to a combination of global geopolitical sentiment and domestic seasonal forex demand. He noted that external uncertainty remains elevated due to escalating conflicts in the Middle East.
“Additionally, there is a seasonal increase in the need for foreign currency, particularly for the payment of external debt (ULN) and dividend repatriation, while the inflow of U.S. dollars remains limited,” Denny explained on May 29, 2026.
In response to these challenges, Ramdan reiterated the directive of BI Governor Perry Warjiyo, asserting that the central bank remains vigilant in safeguarding exchange rate stability “around the world, around the clock.”
This stabilization strategy involves optimized intervention in the forex market through Non-Deliverable Forward (NDF) transactions in offshore markets, spot market interventions, and Domestic Non-Deliverable Forward (DNDF) transactions. Furthermore, the central bank is actively purchasing government securities (SBN) in the secondary market.
To bolster these efforts, BI has strengthened its monetary policy mix by setting pro-market interest rates. This is a critical step aimed at maintaining the appeal of domestic financial assets to ensure continued capital inflows. Notably, the Board of Governors raised the benchmark BI Rate by 50 basis points to 5.25% during its May 2026 meeting.
Stricter Forex Purchase Regulations
In a move to curb market speculation and dampen unproductive demand for U.S. dollars, BI has introduced a new policy regarding the threshold for forex purchases.
Denny announced that the central bank has set a maximum limit of US$25,000 per entity per month for cash forex purchases without underlying documentation. This new regulation is scheduled to take effect in June 2026. Concurrent with this policy, the central bank is intensifying its monitoring of forex market participants.
“Bank Indonesia continues to strengthen coordination with relevant authorities to support financial market stability and the exchange rate, including by increasing oversight of banks and corporations with high levels of U.S. dollar purchasing activity,” said Denny.
Looking ahead, BI remains committed to closely monitoring global and domestic financial market dynamics. The central bank stands ready to implement necessary strategic measures to mitigate exchange rate volatility and bolster the external resilience of the national economy.
Summary
Bank Indonesia has implemented stricter foreign exchange regulations, including a new monthly purchase limit of US$25,000 without underlying documentation, to stabilize the rupiah amid significant depreciation. The currency recently weakened to Rp17,879 per U.S. dollar, driven by geopolitical tensions in the Middle East and seasonal demand for external debt payments and dividend repatriation. To address these pressures, the central bank has also raised the benchmark interest rate to 5.25% and increased its intervention activities in both spot and offshore markets.
The central bank is maintaining its commitment to safeguarding the exchange rate through proactive market monitoring and enhanced coordination with financial authorities. By intensifying oversight of banks and corporations with high foreign currency demand, Bank Indonesia aims to curb speculative activity and restore market confidence. These strategic measures are designed to bolster the national economy’s external resilience against ongoing global and domestic financial volatility.