JAKARTA — Amid the recent sharp depreciation of the Indonesian Rupiah against the US Dollar, Bank Indonesia (BI) and the Financial Services Authority (OJK) have announced intensified oversight of banks and corporations heavily involved in foreign currency purchases.
BI Governor Perry Warjiyo outlined a robust strategy to stabilize the currency during a meeting between President Prabowo Subianto and the Financial System Stability Committee (KSSK) on Tuesday (5/5/2026). A primary pillar of this strategy involves rigorous monitoring of entities with significant dollar-buying activities. “We are increasing supervision over banks and corporations. Specifically, we are coordinating with OJK Chair Frederica Widyasari to monitor institutions with high dollar purchasing activity to ensure the stability of the financial system,” Perry stated.
Tightening Restrictions on Individual Purchases
Beyond institutional oversight, the central bank is implementing stricter limits on individual foreign exchange purchases in the domestic market. Having already reduced the threshold for non-underlying purchases from US$100,000 to US$50,000, BI intends to further lower this limit to US$25,000. Under this new mandate, any dollar purchase exceeding US$25,000 will require clear underlying documentation to be processed, a move designed to strengthen domestic currency stability.
Confidence in Economic Fundamentals
Despite current market volatility, Perry maintains that the Rupiah is currently undervalued. He expressed strong confidence that the currency will regain its stability and strengthen in the coming period. This optimism is anchored in Indonesia’s solid economic fundamentals, characterized by robust economic growth, controlled inflation, consistent credit expansion, and healthy foreign exchange reserves.
“The Rupiah is currently undervalued. We believe it will stabilize and strengthen because our fundamental economic indicators remain strong,” Perry added, reinforcing the sentiments previously shared by the Coordinating Minister for Economic Affairs.
Navigating Global and Seasonal Pressures
While the long-term outlook remains positive, the Rupiah continues to face short-term pressures due to a combination of external and seasonal factors. On the global front, rising oil prices, high interest rates in the United States, and a stronger dollar have created a challenging environment for emerging market currencies, leading to capital outflows.
Furthermore, seasonal demand for dollars typically intensifies between April and June. During this period, corporations and individuals require increased foreign exchange for dividend payouts, foreign debt obligations, and costs associated with the Hajj pilgrimage.
According to data from RTI Infokom, the Rupiah closed at 17,409 per US Dollar on Tuesday (5/5/2026), marking a 0.14% correction. Year-to-date, the currency has depreciated by approximately 4%.
Summary
Bank Indonesia (BI) and the Financial Services Authority (OJK) have intensified their oversight of banks and corporations with high foreign currency purchasing activities to stabilize the depreciating Rupiah. As part of this strategy, BI is further tightening individual foreign exchange purchase limits, requiring underlying documentation for transactions exceeding US$25,000. These measures aim to curb excessive demand for the US dollar and protect the stability of the domestic financial system.
Despite recent market volatility and a 4% year-to-date depreciation, BI remains confident that the Rupiah is currently undervalued. Authorities attribute the currency’s pressure to external factors, such as high US interest rates, alongside seasonal demand for dividends and foreign debt obligations. Officials believe the national currency will eventually recover, supported by strong economic fundamentals, including robust growth, controlled inflation, and healthy foreign exchange reserves.