Jakarta, IDN Times – The Indonesian Rupiah is facing renewed downward pressure, hitting fresh lows against the US Dollar. At the start of today’s trading session, the currency opened at Rp17,897 per US dollar, and this weakening trend persisted throughout the day, eventually closing at Rp17,966.5 per US dollar.
In response to this volatility, what strategies is Bank Indonesia (BI) implementing to stabilize the currency?
1. Maintaining a Consistent Presence in the Market
Ramdan Denny Prakoso, Head of the Communication Department at Bank Indonesia, stated that the central bank is closely monitoring both global and domestic financial market developments that are impacting the Rupiah’s performance.
“Bank Indonesia will continue to monitor global and domestic financial market dynamics. We remain present in the market, taking necessary steps in a consistent and measured manner to maintain the stability of the Rupiah exchange rate and strengthen external resilience,” he said in an official statement on Wednesday (June 3, 2026).
2. Ensuring Active Market Intervention
To support the currency, BI is actively intervening by optimizing its full suite of policy instruments. This approach ensures that market mechanisms function efficiently while maintaining adequate foreign exchange (forex) liquidity within the country.
Ramdan emphasized that stabilization efforts extend beyond mere forex market intervention. The bank is also focused on ensuring smooth transactions and providing the necessary liquidity for business players and investors alike.
3. Implementing Limits on Foreign Currency Purchases
Complementing its intervention strategy, BI has introduced new regulations concerning foreign currency purchases without underlying transactions. Effective June 2, 2026, the limit for cash forex purchases against the Rupiah without supporting documentation is capped at a maximum of 25,000 US dollars per entity per month.
This policy is expected to help balance the supply and demand of foreign currency in the domestic market, providing a buffer against mounting external pressures.
4. Expanding Local Currency Transactions (LCT)
Furthermore, Bank Indonesia continues to promote the use of local currencies in cross-border transactions through the Local Currency Transaction (LCT) scheme. This initiative is designed to reduce dependency on the US dollar and mitigate the risks posed by global exchange rate volatility.
“Currently, Indonesia’s LCT cooperation is active with several partner countries, including China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates,” he explained.
Bank Indonesia maintains that the stability of the Rupiah cannot be sustained by the central bank alone. Consequently, they are strengthening coordination with the government, the Financial Services Authority (OJK), banking institutions, the business community, and various market participants to navigate these challenging economic conditions.
Summary
The Indonesian Rupiah recently reached a record low, closing at Rp17,966 per US dollar amid significant market volatility. In response, Bank Indonesia (BI) is actively monitoring financial conditions and maintaining a consistent presence in the market through measured policy interventions to ensure stability and sufficient foreign exchange liquidity.
To further support the currency, BI has implemented a monthly cap of 25,000 US dollars for forex purchases without underlying transactions and is expanding the Local Currency Transaction (LCT) scheme to reduce reliance on the US dollar. The central bank is also coordinating with the government, the OJK, and various financial stakeholders to strengthen the country’s external resilience against global economic pressures.