{
    "success": true,
    "data": {
        "id": 1632919,
        "msgid": "is-the-tightening-of-foreign-exchange-transactions-effective-in-curbing-rupiah-weakness-1774368435",
        "date": "2026-03-24 22:05:23",
        "title": "Is the Tightening of Foreign Exchange Transactions Effective in Curbing Rupiah Weakness?",
        "author": "",
        "source": "TEMPO_ID_BISNIS",
        "tags": "",
        "topic": "Finance",
        "summary": "Bank Indonesia is lowering the cash purchase threshold for US dollars against the rupiah to US$50,000 per participant per month from April 2026 to mitigate geopolitical volatility's impact on the currency's depreciation. Accompanying measures include raising thresholds for DNDF\/forward and swap transactions to US$10 million, aiming to enhance monitoring of medium-to-large forex deals while expanding hedging options in the domestic market. Economists view these policies as effective for short-term pressure relief but emphasise that sustained rupiah strengthening requires improved global sentiment and capital inflows, given the external pressures driving recent outflows and weakening to near-record lows.",
        "content": "<p>Bank Indonesia is lowering the threshold for cash purchases of\ndollars against the rupiah starting 1 April 2026. This tightening of\ntransactions is aimed at dampening the impact of geopolitical turbulence\non the weakening of the rupiah currency.<\/p>\n<p>BI Governor Perry Warjiyo stated that this effort is to maintain\nforeign exchange flows. \u201cSome of the measures we are taking include\nstrengthening foreign exchange transaction policies that will begin in\nApril to support rupiah exchange rate stability, namely adjusting the\ncash purchase threshold for foreign exchange against the rupiah from\nUS$100,000 per participant per month to US$50,000 per participant per\nmonth,\u201d said Perry during the Board of Governors Meeting on Tuesday, 17\nMarch 2026.<\/p>\n<p>Previously, individuals or companies could purchase up to US$100,000\nin cash dollars per month without providing purchase documents. Starting\nApril 2026, the threshold is being lowered. This means that anyone\npurchasing more than US$50,000 in cash dollars per month must provide\nsupporting documents justifying the need for the purchase or underlying\ndocuments.<\/p>\n<p>BI is also implementing two other transaction policies\nsimultaneously, namely increasing the DNDF\/forward sale threshold from\nUS$5 million per transaction to US$10 million per transaction and\nincreasing the buy and sell swap threshold from US$5 million to US$10\nmillion per transaction.<\/p>\n<p>Permata Bank\u2019s Chief Economist Josua Pardede stated that the central\nbank\u2019s new policy is quite effective in curbing short-term pressure on\nthe rupiah. \u201cHowever, its impact is greater as a buffer against\nvolatility rather than a driver of sharp strengthening,\u201d he told Tempo\non Tuesday, 24 March 2026.<\/p>\n<p>According to Josua, in terms of effectiveness, it will primarily be\nseen in changes in market behaviour. The lowered cash purchase limit and\ndocumentation for overseas transfers make medium-to-large foreign\nexchange transactions more quickly monitored, thus narrowing the room\nfor excessive precautionary dollar purchases.<\/p>\n<p>At the same time, the increase in DNDF or forward and swap limits\nexpands the space for businesses to hedge in the domestic market, so\nthat dollar needs are not entirely concentrated in the spot market. \u201cSo\nthe direction of the policy is clear: to hold back US dollar demand that\ncould accelerate weakening while expanding more orderly risk management\nchannels,\u201d he said.<\/p>\n<p>With foreign exchange reserves at the end of February 2026 amounting\nto US$151.9 billion or equivalent to 6.1 months of imports, BI still has\nsufficient buffers to maintain market stability. However, the main\nsource of rupiah pressure at present comes from external factors.<\/p>\n<p>BI recorded that in March 2026, there was a net portfolio capital\noutflow of US$1.1 billion, and the rupiah was traded near its weakest\nrecord around 17,000 per US dollar. Therefore, this new policy is an\neffort to prevent the rupiah from weakening too quickly and too deeply,\nnot as a tool that by itself reverses the rupiah\u2019s direction to\nstrength.<\/p>\n<p>To achieve rupiah strengthening, BI needs external support from\nimproving global sentiment, falling oil prices, and recovering foreign\ncapital inflows. \u201cSo it\u2019s not solely from tightening foreign exchange\ntransaction rules,\u201d said Josua.<\/p>\n<p>Bank Indonesia reported on 16 March 2026 that the rupiah was around\n16,985 per US dollar, weakening 1.29 per cent compared to the end of\nFebruary. Meanwhile, Jakarta Interbank Spot Dollar Rate (JISDOR) data\nrecorded that at the close of trading on 17 March 2026, the rupiah was\nat 16,982 per US dollar. In the spot market, at the close on 24 March\n2026, the rupiah was recorded at 16,897 per US dollar or up 99 points\nfrom the previous day.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/is-the-tightening-of-foreign-exchange-transactions-effective-in-curbing-rupiah-weakness-1774368435",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}