Bank Indonesia intensifies market intervention as rupiah tumbles

Bank Indonesia (BI) is intensifying efforts to stabilize the rupiah after its value against the US dollar bore the brunt of negative sentiments from the currency crisis in Argentina.

BI Governor Perry Warjiyo said the central bank was upping the ante of its dual intervention policy in both the foreign exchange and secondary bond markets in an effort to stem the rupiah’s further depreciation.

“In the last two days, we are increasing the volume of intervention in the foreign exchange market. We also bought sovereign bonds from the secondary market,” said Perry in Jakarta on Friday.

The central bank has bought bonds worth Rp 3 trillion (US$202 million) that was sold by foreign investors as of Friday afternoon.

Perry added that BI targeted to lure at least $400 million from its daily foreign exchange swap auction on Friday in a bid to provide some relief for the rupiah.

The rupiah tumbled to its lowest level since the 1998 financial crisis as of Friday, being traded at Rp 14,711 against the US dollar, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).

Perry added that the central bank would continue to monitor the latest developments in the global economy, particularly the economic turmoil in other emerging markets such as Argentina and Turkey.

He said the Indonesian economy was still resilient as indicated by low inflation and stable economic growth, supported by the government’s strong commitment for structural reforms. (bbn)

 

 

Source : www.thejakartapost.com

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