(Bloomberg) -- Indonesia discouraged its state-owned enterprises from making huge dollar purchases, showing the all-hands-on-deck approach that the nation has taken to support the rupiah.

State-run firms with large import requirements or foreign currency-denominated debt must avoid buying large amounts of US dollars while the rupiah is under pressure, Coordinating Minister for Economic Affairs Airlangga Hartarto said in a briefing on Thursday.

Asian officials are battling to shield their currencies, many of which have fallen to multi-year lows amid a surging greenback as the Federal Reserve pushes back rate cuts and fighting continues in the Middle East.

“It’s not wise to keep buying dollars during this time when the rupiah is depreciating,” Hartarto said at the briefing. “We encourage state-owned enterprises to restrain huge dollar purchases, especially for imports of consumer goods.”

Natural-resource exporters must also comply with rules to repatriate their dollar earnings to help bolster foreign exchange reserves and underpin the local currency, he added.

The rupiah this week slumped past the 16,000 per dollar psychological level for the first time since April 2020, prompting further Bank Indonesia intervention to support the currency. On Thursday, the currency halted two days of declines to close 0.3% stronger at 16,175 against the dollar. 

The rupiah may touch the 16,500 level if geopolitical tensions worsen, State-Owned Enterprises Minister Erick Thohir said in a separate statement on Thursday as he urged firms to “optimize” their dollar purchases. The likes of oil giant PT Pertamina and state utility PT Perusahaan Listrik Negara can often have an outsized effect on foreign exchange trading in Southeast Asia’s largest economy, which relies heavily on imports from food to fuel.

Thohir likewise told state firms to ensure their operations are shielded from currency volatility and conduct stress tests if needed. Pertamina will seek to renegotiate its FX-denominated contracts to rupiah.

“All state-owned enterprises are expected to be on alert,” said Thohir.

 

--With assistance from Norman Harsono, Soraya Permatasari and Fathiya Dahrul.

(Updates with more details from ministers, Pertamina)

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