OJK Reveals Banks' Foreign Exchange Needs Do Not Trigger Exchange Rate Volatility
The Executive Head of Banking Supervision at the Financial Services Authority (OJK), Dian Ediana Rae, assesses that the banking sector still has ample room to fulfil customers’ foreign exchange (forex) needs without increasing vulnerability to exchange rate volatility. This is in line with the banking sector’s Net Foreign Exchange Position (PDN), which remains within prudential limits at 1.46% in February 2026, well below the threshold.
“OJK ensures that banks have strong and adequate foreign exchange liquidity risk management, including through regulations and monitoring of liquidity ratios such as the foreign exchange Liquidity Coverage Ratio (LCR) and PDN monitoring to assess the adequacy of banks’ buffer capacity in meeting short-term forex needs and potential market pressures,” said Dian Ediana Rae in a written response in Jakarta on Friday, 24 April 2026, as quoted from Antara.
She explained that OJK consistently adopts an integrated approach through coordination with Bank Indonesia (BI) as the monetary authority. This is done to ensure that foreign exchange liquidity availability in the domestic banking sector remains adequate, particularly in serving corporate needs with foreign debt obligations.
This coordination, according to Dian Ediana Rae, is aimed at maintaining domestic forex market stability, among other things through monetary instruments such as swaps, repos, and market interventions to ensure that foreign exchange liquidity adequacy in the financial system remains maintained.
OJK also urges banks to implement prudent asset and liability management (asset-liability management). This includes maintaining an adequate balance between foreign exchange funding sources and foreign exchange credit disbursement.
As of February 2026, third-party funds (DPK) in forex were recorded at Rp1,525 trillion. Meanwhile, forex credit stood at Rp1,241 trillion. Thus, the forex Loan-to-Deposit Ratio (LDR) was 81.35%.
In addition, OJK encourages banks to expand and diversify foreign exchange funding sources, both through forex DPK, interbank loans, and utilisation of access to global markets. OJK also encourages corporations with foreign debt to consistently apply prudence principles such as hedging obligations, liquidity adequacy, and maintaining debt quality and ratings to mitigate exchange rate risks and financing risks.
With a combination of strengthening internal banking practices, policy synergy and coordination, and risk management on the corporate side, said Dian Ediana Rae, OJK ensures that foreign exchange liquidity needs can still be met. “Without disrupting the overall stability of the financial system.”