OJK Says Banks Can Meet Foreign Exchange Needs without Triggering Increased Vulnerability to Exchange Rate Volatility

JAKARTA - The Financial Services Authority (OJK) considers that banks have enough room to meet customer foreign exchange (forex) needs without increasing vulnerability to exchange rate volatility.

This is in line with the net foreign exchange position (PDN) of the banking sector which is maintained within the prudential limit, namely at the level of 1.46 percent in February 2026 or still far below the threshold.

"OJK ensures that banks have strong and adequate foreign exchange liquidity risk management, including through the regulation and monitoring of liquidity ratios, including the foreign exchange liquidity coverage ratio (LCR) and monitoring of PDN in order to assess the adequacy of the bank's buffer capacity in meeting short-term foreign exchange needs and potential market pressures," said the Head of Banking Supervision of OJK Dian Ediana Rae quoted by Antara.

Furthermore, Dian said that OJK always conducts an integrated approach through coordination with Bank Indonesia (BI) as the monetary authority.

This is done in order to ensure that the availability of foreign exchange liquidity in domestic banks remains adequate, especially to serve the needs of corporations that have foreign debt obligations.

The coordination was carried out in an effort to maintain the stability of the domestic foreign exchange market, including through monetary instruments such as swaps, repos, and market interventions to ensure that the adequacy of foreign exchange liquidity in the financial system is maintained.

Furthermore, OJK also asked banks to implement asset and liability management (asset-liability management) prudently, including maintaining an adequate balance between foreign exchange funding sources and foreign exchange credit distribution.

As of February 2026, the foreign exchange DPK was recorded at Rp1,525 trillion, while foreign exchange loans were Rp1,241 trillion, so that the foreign exchange LDR was 81.35 percent.

In addition, banks are encouraged to expand and diversify foreign exchange funding sources, both through foreign exchange DPK, interbank loans, and the use of access to global markets.

On the other hand, OJK encourages corporations with foreign debt to always apply the principle of prudence such as hedging obligations, liquidity adequacy, and maintaining the quality and rating of debt to mitigate exchange rate risk and financing risk.

"With the combination of internal bank strengthening, policy synergy and coordination, and risk management on the corporate side, OJK ensures that foreign exchange liquidity needs can still be met without disrupting the overall stability of the financial system," said Dian.