Indonesia's foreign exchange reserves hit their longest consecutive decline since 2018, highlighting the pressure on policymakers to stabilize the exchange rate.

In May, Indonesia's foreign exchange reserves continued to decline for the fifth consecutive month, highlighting the cost that policymakers are paying to stabilize the Indonesian rupiah exchange rate, which had previously fallen to historic lows. The Bank of Indonesia stated in an email on Monday that Indonesia's foreign exchange reserves fell to $144.9 billion last month, marking the longest consecutive decline since 2018. The decrease was attributed to government debt repayments and measures taken by the central bank to stabilize the rupiah exchange rate amid high uncertainty in global financial markets. The Indonesian rupiah fell 0.7% against the US dollar, reaching a new historic low. The yield on Indonesia's 10-year government bonds further rose to 7.14%, the highest level since April 2025. Due to declines in Asian stock markets, Indonesia's benchmark stock index fell by 2.5%. The Bank of Indonesia had previously increased interventions in the currency and bond markets to support the rupiah, which has depreciated by approximately 8% so far this year. Foreign investors have withdrawn over $3.5 billion from the Indonesian stock market, leading to a decrease in Jakarta's benchmark stock index of over 30% this year.