BI vows to intervene to protect rupiah
The Jakarta Post
The Indonesian central bank has expressed its readiness to intervene in the currency market to defend the currency at a fixed rate, as the rupiah headed toward breaching the 12,000 per US dollar psychological barrier again on Wednesday.
'Bank Indonesia will be ready to intervene in the market to stabilize the volatility of the rupiah exchange rate,' Dody Budi Waluyo, BI executive director for monetary policy, said on Wednesday.
He noted, however, that the central bank would only intervene to smooth currency volatility, instead of strengthening the rupiah at a certain level.
'We will not try to fix the level of the rupiah ' it will determined only by the market,' Dody said, adding he would allow the rupiah to be at a 'flexible' rate that was consistent with prevailing economic fundamentals.
His statement came after the rupiah declined again on Wednesday, depreciating by 0.8 percent to trade at Rp 12,076 per dollar as of 10:20 a.m. in Jakarta, prices from local banks compiled by Bloomberg show.
One-month non-deliverable forwards (NDF), a rupiah offshore rate compiled by banks in Singapore, hit Rp 12,076 per dollar during the day, its weakest level in four years.
BI has loosened its market intervention recently, as its foreign exchange (forex) reserves ' used by the central bank to intervene and supply dollars in the market ' have risen for three consecutive months to top $97 billion by the end of October.
The latest forex reserves figure will be announced on Dec. 6, BI spokesperson Difi A. Johansyah told The Jakarta Post on Wednesday.
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