BI Harmonizes Sharia and Conventional Foreign Exchange Regulations: Sharia Banks to Face New Hedging, Financing and Reporting Rules

Bank Indonesia (“BI”)’s Board of Governors has issued Regulation No. 12 of 2026 on the Amendment (“Amendment”) to Regulation of the BI Board of Governors No. 16 of 2024 on Foreign Exchange Market Transactions Based on Sharia Principles (“Regulation 16/2024”). Broadly speaking, the Amendment has now significantly updated BI’s sharia foreign exchange transaction framework by replacing several requirements and transaction thresholds with references to BI Regulations on conventional foreign exchange market transactions, i.e. Regulation of the BI Board of Governors No. 11 of 2024, as amended by Regulation of the BI Board of Governors No. 11 of 2026.