JAKARTA - The Rupiah (IDR) exchange rate in the offshore market (Non Deliverable Forward/NDF) was close to IDR 17,200 per US$ in the morning session on Monday (7/4). This condition prompted Bank Indonesia (BI) to intervene to stabilise the Rupiah in the off shore markets in Asia, Europe, and New York, United States (US).

Quoting a press release on Monday (7/4), Ramdan Denny Prakoso, Executive Director of the Head of the BI Communication Department said that the Rupiah was under pressure amid China's retaliation policy in response to the US policy that announced reciprocal tariffs on Wednesday (2/4).

‘BI will also intervene aggressively in the domestic market since the opening on 8 April 2025 by intervening in the foreign exchange market (Spot and DNDF) and purchasing SBN in the secondary market,’ he said.

From various sources compiled, the offshore NDF market is a foreign exchange market abroad that trades NDF contracts, which are forward contracts for foreign currency transactions without physical delivery of currency. Currencies traded are not only currencies from developed countries, but also currencies from emerging markets such as Indonesia. Participants in the off shore NDF market include banks, corporates and institutional investors.

The offshore NDF market refers to a two-party currency derivative contract to exchange cash flows between the NDF and the prevailing spot rate. This measure is for a number of purposes including, protection from economic changes, reducing exchange rate risk and managing cash flows.

NDF policies can be implemented before, during and after transactions involving foreign currencies. Considerations in NDF implementation include the level of risk, cost and maturity period.(LK/LM)