• Down USD10.6bn from a recent peak in Dec-25, Indonesia’s Jun-26 FX reserves edged slightly up to USD145.6bn from USD144.9bn in May, marking the first increase after four consecutive monthly declines and coming in above SSI’s forecast of USD144.0bn. BI’s FX reserves defense during this period was masked by higher multi-currency borrowings with USD1.5bn international bond issuance by Danantara and USD1.08bn Samurai and Blue bonds.
• Additionally, BI has been aiming at crushing domestic retail speculation by lowering the ceiling for cash and spot foreign currency purchases without underlying documents from USD100,000 to USD50,000 in May-26 and another cut to USD25,000 in Jun-26, before a further curb to USD10,000 effective 1 Jul-26. ⁠This has helped FX reserves to stand at 5.5 months of imports or 5.4 months of imports and government external debt servicing, higher than the international adequacy benchmark of around three months.
• Following tighter monetary policy with 100bps higher BI rate, the central bank has managed to maintain the IDR level below 18K to the USD. This indicates that while intervention costs have become more expensive, it has assisted in supporting market confidence and providing more stable domestic financial markets.
• ⁠⁠Looking ahead, provided that the government can come up with a clearer and improved fiscal communication, we expect Indonesia’s FX reserves to remain broadly stable in 2H26. Nevertheless, downside risks remain. Uncertainty surrounding global monetary policy, elevated US Treasury yields, geopolitical tensions, and potential episodes of capital outflows could continue to generate volatility in emerging market currencies, including the IDR. In addition, Indonesia's recent deterioration in trade performance warrants close monitoring, as weaker export earnings could moderate the pace of reserve accumulation.