{
    "success": true,
    "data": {
        "id": 1758453,
        "msgid": "bank-indonesia-reveals-that-the-us-25-000-purchase-restriction-is-not-permanent-1779541960",
        "date": "2026-05-22 19:48:53",
        "title": "Bank Indonesia Reveals that the US$25,000 Purchase Restriction Is Not Permanent",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Regulation",
        "summary": "Bank Indonesia says the requirement to report underlying transactions for cash\/spot foreign exchange purchases is a temporary measure to curb panic buying and shift activity toward hedging. The policy will be lifted when the market matures and financial literacy improves; a June 2026 cut to the US$25,000 threshold is part of phased tightening, with derivatives like swaps and forwards allowed up to US$10 million to bolster market resilience.",
        "content": "<p>Bank Indonesia reveals that the US$25,000 purchase restriction is not\npermanent. Jakarta, CNBC Indonesia - Amid global financial market\nvolatility that pressures the rupiah exchange rate, Bank Indonesia\ncontinues to dynamically adjust policy. One main instrument currently\ntightened is the obligation to submit supporting documents or underlying\ntransactions for cash or spot foreign exchange purchases. This policy\nwas introduced solely to dampen market panic that often leads to\nspeculative buying, while encouraging deeper domestic financial markets\ntoward hedging instruments (derivatives). Director of the Financial\nMarket Development Department at Bank Indonesia, Ruth, in a\nquestion-and-answer session with the media, explained that tightening\nthe underlying is essentially an authority effort to ensure that every\ndollar purchase in the cash market has a real need basis. She likened\nthe spike in FX purchases when the rupiah is under pressure to panic\nbuying in the society. \u2018People panic; much like during Covid-19, what is\nbought first is rice and oil. The same goes for foreign exchange; if\nthere are mothers with children studying abroad or companies with import\nobligations, when the rupiah weakens, they will rush to buy dollars\nearlier than their needs,\u2019 Ruth said. The surge in demand driven by\npsychological sentiment makes the exchange rate reflect fundamentals\nless accurately, hence BI intervenes to neutralise the situation.\nAlthough supervision rules are tightened, monetary authorities signal\nclearly that the underlying obligation is not a policy that will apply\nforever. Regarding when the requirement might be dropped, Ruth stressed\nthat it depends heavily on market maturity and financial literacy of the\neconomic players. According to her, when literacy in derivative\ninstruments among the public is high and they no longer react to market\nfluctuations with irrational cash speculation, the restrictions can\ngradually be lifted. \u2018If we can convince that there is no more\nspeculation, and we believe all transactions are based on correct\ncalculations and reflect fair pricing, at that time we may not need the\nunderlying anymore. Because we do not want our exchange rate to reflect\nsomething unreal,\u2019 she stated. To illustrate the effectiveness of this\npolicy tightening, the following are details of daily FX market\ntransactions before and after the threshold adjustment: Based on the\nabove data, it is evident that this can significantly increase the\npressure to buy USD; if applied over a 20 working day period, it could\nachieve efficiency of more than US$1 billion per month. From that\njourney, the underlying instrument is a highly dynamic control tool. In\n2015 during the taper tantrum, BI also pressed this transaction limit to\nUS$25,000, before eventually relaxing it back to US$100,000 in 2022 when\nthe market gradually stabilised. Therefore, the plan to cut the cash FX\npurchase limit to US$25,000 to be implemented in June 2026 is a measured\nstep to curb expectations of Rupiah weakness. Together with tightening\nin the cash market, BI continues to open wide space for businesses to\nuse hedging instruments such as swaps and forwards, with transaction\nlimits eased up to US$10 million. Through a combination of cash market\ndiscipline and easier access to hedging instruments, Bank Indonesia is\nconfident that the domestic financial market structure will become more\nresilient, efficient, and ready to face various economic challenges in\nthe future without relying on rigid restrictions.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/bank-indonesia-reveals-that-the-us-25-000-purchase-restriction-is-not-permanent-1779541960",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}