JAKARTA, Indonesia—Indonesia’s central bank is pushing through a regulation prohibiting foreign currencies, including U.S. dollars, from being used in domestic transactions as it tries to get a grip on the falling rupiah.

The regulation, which takes effect Wednesday, has raised uncertainties and concerns of increased operating costs and other risks among businesses involved in mining, oil and gas, manufacturing and property: firms that transact in U.S. dollars as a hedge against the rupiah, a historically volatile currency...