The US dollar continued to strengthen against the Indonesian rupiah on Thursday, breaking through the Rp18,000 level amid ongoing pressure on the domestic currency.
According to Investing.com data on Thursday (4 June 2026), the US dollar rose by 49.4 basis points, or 0.28 per cent, to Rp18,015 in morning trading. During the day, the exchange rate fluctuated between Rp17,937 and Rp18,024.
Google Finance data also showed the US dollar reaching Rp18,010 at 23:23 UTC (06:23 WIB) before easing to Rp17,971 at 00:15 UTC (07:15 WIB). Meanwhile, Bloomberg data recorded the greenback strengthening by 0.71% on a daily basis, with the latest rate standing at Rp17,966.
The latest movement reflects continued volatility in the foreign exchange market as investors monitor global economic developments and their impact on emerging market currencies, including the rupiah.
Bank Indonesia Reaffirms Commitment to Rupiah Stability
Responding to the weakening rupiah, Bank Indonesia (BI) said it would continue to closely monitor developments in both global and domestic financial markets while taking the necessary measures to maintain exchange rate stability.
Head of Bank Indonesia’s Communications Department, Ramdan Denny Prakoso, stated that the central bank remains committed to supporting market stability and strengthening Indonesia’s external resilience.
“BI continues to monitor developments in global and domestic financial markets. Furthermore, BI will remain present in the market by taking the necessary steps to maintain rupiah exchange rate stability and strengthen external resilience,” Denny said in a written statement on Wednesday (3 June 2026).
He added that the central bank would continue to optimise its available policy instruments to ensure orderly market conditions.
“BI continues to be present in the market by optimising all available policy instruments to ensure proper market mechanisms and maintain sufficient foreign exchange liquidity to support financial market stability,” Denny said.
New Foreign Exchange Policy and Local Currency Cooperation
As part of its policy measures, Bank Indonesia introduced a cash threshold for foreign exchange purchases against the rupiah without an underlying transaction. The regulation, which came into effect on 2 June 2026, limits such purchases to US$25,000 per participant per month.
The central bank has also continued to promote the use of local currencies in international transactions through its Local Currency Transaction (LCT) framework. The initiative aims to reduce reliance on the US dollar and mitigate the risks associated with exchange rate fluctuations.
Indonesia has established LCT cooperation agreements with several partner countries, including China, Japan, Malaysia, Thailand, South Korea and the United Arab Emirates.
Bank Indonesia has previously stated that expanding local currency settlement mechanisms is part of its broader strategy to strengthen economic resilience and support more stable cross-border transactions amid uncertainty in global financial markets.
Market participants are expected to continue monitoring developments in the rupiah exchange rate and any further policy responses from the central bank as currency volatility persists.
