Seven Measures by Bank Indonesia to Shield the Rupiah from US Dollar Pressure
Bank Indonesia is focused on maintaining rupiah stability amid financial market turbulence triggered by Middle Eastern conflict following US and Israeli attacks on Iran since late February 2026.
This was stated by Bank Indonesia Governor Perry Warjiyo during a press conference following the March 2026 board of governors meeting. He emphasised that this stability focus meant the meeting’s statement no longer included discussion of room for reducing the BI Rate to protect exchange rate stability.
“Because the impact of the war in the Middle East means that in our current statement we no longer mention the possibility of reducing the interest rate,” Perry said.
Perry stated that by maintaining the benchmark interest rate at 4.75%, Bank Indonesia has sufficient scope to intervene when rupiah exchange rate volatility occurs, as experienced throughout the month. The held benchmark rate maintains attractive returns for foreign investors’ portfolio investment in the domestic market. Incoming foreign capital flows strengthen foreign exchange reserves that can be used for intervention in financial markets.
“We will likely continue to maintain the BI Rate to strengthen intervention and ensure adequate foreign exchange reserves, emphasising this going forward according to prevailing dynamics,” Perry said.
Beyond implementing the held BI Rate policy and exchange rate intervention through promoting foreign investment inflows to portfolio instruments and foreign exchange reserves, Perry stated that Bank Indonesia also has additional policies to strengthen the rupiah’s value going forward.
There are at least four additional policies to strengthen exchange rate stability, alongside the three aforementioned policies, making a total of seven measures to dampen rupiah-dollar exchange rate volatility.
These four new policies relate to adjusting foreign exchange transaction thresholds from April 2026.
“Foreign exchange transaction policies effective April 2026 to support rupiah exchange rate stability through adjustment of cash foreign currency purchase thresholds against the rupiah,” Perry said firmly.
For the first measure, the cash foreign currency purchase threshold against the rupiah will be adjusted from US$100,000 per actor per month to US$50,000 per actor per month.
The sale threshold for DNDF Forward will also be adjusted upward, from US$5 million per transaction to US$10 million per transaction.
Additionally, the buy and sell swap thresholds will be adjusted from Rp5 million to Rp10 million per transaction.
Finally, strengthening foreign exchange flow reporting regulations involves adjusting the threshold for required supporting documents for outgoing fund transfers abroad in foreign currency, from US$100,000 to US$50,000.
The detailed foreign exchange market transaction policy rules effective April 2026 to support rupiah exchange rate stability are:
Adjustment of cash foreign currency purchase threshold against the rupiah from US$100,000 per actor per month to US$50,000 per actor per month
Increase of DNDF/Forward sale threshold from US$5 million per transaction to US$10 million per transaction
Increase of buy and sell swap thresholds from US$5 million to US$10 million per transaction
Strengthening foreign exchange flow reporting regulations by adjusting the required documentation threshold for outgoing transfers in foreign currency from US$100,000 to US$50,000