Indonesia's forex hedging scheme draws nearly $10 billion in foreign capital

Bank Indonesia introduced a suite of incentives in June covering domestic non-deliverable forward contracts, FX buy-swap facilities, and local-currency transaction settlements with trading partners. Governor Destry Damayanti announced that the program has generated about $9.9 billion of foreign inflows to date, reflecting strong investor response. The central bank highlighted these tools as part of a broader effort to preserve rupiah stability and to deepen the domestic foreign-exchange and money-market infrastructure.

She attributed the recent depreciation of the rupiah to heightened geopolitical tensions in the Middle East, the U.S. Federal Reserve’s tight monetary policy, and a broader risk-off sentiment among overseas investors. Looking forward, the bank expects the currency to remain steady, supported by its policy framework, attractive yields, controlled inflation, and solid macroeconomic fundamentals.