The rupiah, Asia's worst performing Asian currency last year, has been battered in recent months by concerns about the country's current account deficit and by corporate dollar demand.
Dahlan Iskan, the state enterprises minister, has told state-owned energy firm Pertamina and power utility PLN to stop asking state banks to buy dollars from the money market, part of an agreement between Iskan and Bank Indonesia Governor Darmin Nasution to strengthen the rupiah, the ministry said in a statement.
"It is definitely a good plan and would help to stabilize sentiment in the market, especially at times when onshore US dollar liquidity tightens up at times of stress. This should be good news for the Indonesian rupiah, at least on the margin," said Gundy Cahyadi, economist at OCBC in Singapore.
The rupiah's indicative spot price was 9,620 per US dollar by late Friday trade, up 0.2 percent from the previous day.
This was a recovery from an intraday low of 9,705, a level the central bank has been seen defending this month.
In 2012 and the first part of 2013, most Asian currencies rose, while the rupiah bucked the regional trend to post losses. But the rupiah, which shed 6 percent against the dollar in 2012, has now edged into positive territory for this year.
Dealers said on Friday that dollar demand from local importers had eased, while some equity-linked flows had also helped real market traded levels to edge up to around 9,850, from 9,900 last week.
The rupiah weakness has yet to lead to a big sell-off in rupiah assets, with foreign bond ownership rising to record levels at 33 percent of the total this month, and stocks hitting a fresh record high on Friday.
However, traders say firms have been hoarding dollars and a spike in one month forward offshore rates in recent weeks showed increased hedging of rupiah positions.
The currency has taken the shine off market sentiment about Indonesia, a fast-growing G20 economy seen as an investor safe haven in recent years.
Pertamina, which produces crude oil and natural gas but has to import fuel products from international oil markets priced in dollars, requires about one-third of the nation's dollar needs.
Cahyadi said the central bank and Pertamina had in the past made a similar deal to prevent excessive weakening of the rupiah.
"Pertamina is historically one of the bigger buyers of US dollars in Indonesia and growing consumption of fuel has been a factor that remains supportive of its dollar demand," he said.
Ashish Agrawal, a director at Credit Suisse in Singapore, said the measure taken on Friday "should primarily impact forex sentiment and the impact on bonds will be meaningful only if the rupiah were to gain on these moves."
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