Bank Indonesia has implemented new measures to manage foreign exchange volatility and support the Indonesian Rupiah, according to DBS Group Research’s Radhika Rao [1]. The central bank has tightened the monthly cap on foreign currency purchases without supporting documents to $25,000, down from the previous $50,000 limit, following a similar action last month [1]. This move is part of a broader seven-step agenda aimed at ensuring that US dollar purchases are linked to genuine underlying needs rather than speculative activity [1].
In addition to the FX curbs, Bank Indonesia has continued its bond-buying program, with IDR 123 trillion in purchases year-to-date, coordinated with the Ministry of Finance [1]. The central bank has also enabled selected dealers to access offshore non-deliverable forwards (NDFs) as part of its intervention strategy [1]. These measures, along with attractive SRBI returns, have attracted offshore investors in recent weeks [1].
DBS notes that the risk of further FX restrictions could decrease if a US–Iran ceasefire helps stabilize regional currencies [1].
CONCLUSION
Bank Indonesia’s recent tightening of FX purchase limits and ongoing bond-buying efforts are designed to stabilize the Rupiah and curb speculative demand for US dollars. The effectiveness of these measures may be enhanced if regional geopolitical tensions ease, reducing the need for additional FX controls.