Rupiah Continues to Weaken, OJK Sees Stable Impact on Financial Sector

Indonesia's financial services authority (OJK) has assessed the current trend of rupiah depreciation, which has surpassed the Rp 18,000 mark against the US dollar, as having a relatively stable impact on the nation's financial services sector. OJK Chairperson Friderica Widyasari Dewi stated that the direct exposure of Indonesian banks to exchange rate risks is well-managed.

Dewi explained that the banking sector's capital adequacy ratio (CAR) remained strong at 23.97 percent as of April 2026. This robust capital buffer provides sufficient capacity to absorb potential risks arising from currency fluctuations. Furthermore, the net foreign exchange position of Indonesian banks has consistently remained well below the maximum threshold of 20 percent of bank capital, indicating controlled exposure to currency volatility.

Despite these reassuring figures, the OJK remains vigilant about various channels through which exchange rate fluctuations could transmit risks to financial institutions. These include the potential for increased foreign currency obligations for corporations, pressure on sectors heavily reliant on imports, and the impact of rising global commodity prices, particularly energy, on operational costs and raw material expenses. Such increases could affect the repayment capacity of affected debtors.

To mitigate these identified risks, the OJK plans to strengthen its monitoring of foreign exchange activities within banks. This will involve closely tracking daily net foreign exchange positions, ensuring adequate foreign currency liquidity, and enforcing compliance with foreign exchange regulations. The authority aims to proactively manage potential vulnerabilities stemming from the ongoing currency movements.