Exchange rate touches Rp17,900 level, BI strengthens synergy with various parties

Bank Indonesia (BI) is strengthening synergy with all stakeholders, including the government, in response to the weakening rupiah, which has recently hit new levels in the range of Rp17,900 per US dollar.

Ramdan Denny Prakoso, Head of the BI Communication Department, stated that BI views the stability of the rupiah exchange rate as a task requiring synergy from all parties. “To this end, Bank Indonesia continues to strengthen coordination with the government, the Financial Services Authority (OJK), the banking sector, the business community, and market participants to ensure that market mechanisms work well and to bolster the external resilience of the national economy,” Ramdan said in a written statement in Jakarta on Wednesday.

Furthermore, Ramdan ensured that the Indonesian central bank continues to closely monitor developments in both global and domestic financial markets. BI also confirmed its ongoing presence in the market, taking necessary, consistent, and measured steps to maintain the stability of the rupiah exchange rate and strengthen external resilience.

“Bank Indonesia remains active in the market by optimising all its policy instruments to ensure market mechanisms function properly and to maintain adequate foreign exchange liquidity to support financial market stability,” said Ramdan.

As part of the measures to maintain exchange rate stability, effective 2 June 2024, BI has implemented a threshold for cash purchases of foreign exchange against the rupiah without underlying documentation, limited to 25,000 US dollars per participant per month. Additionally, BI continues to encourage the use of local currencies in bilateral cooperation through the Local Currency Transaction (LCT) scheme to reduce dependence on the US dollar and mitigate exchange rate volatility risks. LCT cooperation has already been established with China, Japan, Malaysia, Thailand, South Korea, and the United Arab Emirates.