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View all search resultsBI escalates intervention to support rupiah
Bank Indonesia (BI) says it has stepped up its intervention measures, supplying the currency market with more dollars to stabilize the rupiah, which has plunged to a level unseen since the 1997-1998 Asian financial crisis
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B
ank Indonesia (BI) says it has stepped up its intervention measures, supplying the currency market with more dollars to stabilize the rupiah, which has plunged to a level unseen since the 1997-1998 Asian financial crisis.
'The intensity of our intervention in the foreign exchange and bonds market will increase given the escalating pressure on rupiah,' BI deputy governor Perry Warjiyo said on Tuesday.
'The rupiah has now recovered and is now stable at around 12,700 [per US dollar],' he added.
The rupiah took another nosedive on Tuesday, plunging by 301 basis points in the morning session to trade at 12,900 per dollar, the lowest level in 16 years, according to the Jakarta Interbank Spot Dollar Rate (JISDOR), which is a price compiled by local banks published by BI every work day at 10 a.m.
Following the central bank's intervention, the rupiah strengthened in the afternoon trading session to 12,721 as of 1:03 p.m., according to local banks' prices in Bloomberg.
The recent fall in the rupiah, which has fallen by around 4 percent month-to-date, defied market logic, Morgan Stanley analyst Geoffrey Kendrick was quoted by Bloomberg as saying.
'There is no particular domestic factor to justify the rupiah's weakness,' Bank of America Merrill Lynch analyst Chua Hak Bin told The Jakarta Post recently.
'We continue to believe that Indonesia's fundamentals are improving with the current account and fiscal balances improving on the back of lower oil prices.'
BI's foreign exchange reserves ' used by the central bank to supply dollars and intervene in the market to stabilize the rupiah ' dropped $900 million in November, the biggest monthly decline this year, to $111.1 billion by the end of last month.
Indonesia has among the lowest foreign-exchange reserve coverage ratios in the region, as its dollar disposal is only sufficient to cover 6.4 months of imports and foreign-debt payments, compared to approximately 8 months in Malaysia or 11 months in the Philippines. (ebf)(++++)
