BI Governor Explains Reasons for High Foreign Exchange Demand in April-May Period, This is the Cause

Jakarta – Bank Indonesia Governor Perry Warjiyo has assured that foreign exchange (forex) needs are being fulfilled during the increased demand in April to May 2026, due to seasonal factors.

He explained that the surge in forex demand during that period is triggered by the public’s needs for performing umrah and hajj pilgrimages.

In addition, during that period, corporations often conduct dividend repatriations along with foreign debt payments.

“Seasonally, in April and May, forex demand is high. For what? We pray for all our citizens performing umrah and hajj, God willing they return healthy, and we ensure their dollar needs are met,” said Perry during the Press Conference on the Results of the Periodic KSSK Meeting II of 2026 at the Bank Indonesia Office Complex, Jakarta, on Thursday, 7 May 2026.

“Then also in April and May, many corporations repatriate dividends and pay foreign debts, both interest and principal. So the conditions are like that,” he stated.

Therefore, Perry also assured that amid the ongoing exchange rate weakening, the central bank will remain fully committed to safeguarding rupiah stability while continuing to coordinate with the government.

“Why is there rupiah weakening? All world currencies are weakening. We keep the weakening rate not too high by going all out,” said Perry.

He revealed that the rupiah exchange rate weakening is driven by several global factors, including high geopolitical tensions in the Middle East and rising world oil prices.

In addition, high US interest rates are prompting foreign investors to withdraw funds from emerging market countries, thereby strengthening the US dollar exchange rate.

However, Perry emphasised that the rupiah is currently undervalued compared to the economic fundamentals. He also assured that the domestic economic conditions remain solid.

This includes first-quarter 2026 economic growth recorded at 5.61 percent (year-on-year), a trade balance surplus, and high foreign reserves.