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BI should increase rate to help rupiah, says minister
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Coordinating Economic Minister Darmin Nasution (JP/Anton Hermansyah)
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oordinating Economic Minister Darmin Nasution has urged Bank Indonesia (BI) to consider increasing its benchmark seven-day reverse repo rate to ease the pressure off a weakening rupiah.
“If pressure against rupiah continues, the rate should be adjusted,” Darmin said in Jakarta on Wednesday as reported by kontan.co.id.
Previously, BI Governor Agus Martowardojo said the central bank was open to the possibility of increasing its repo rate, which currently stands at 4.25 percent, if pressure against the rupiah continues and threatens Indonesia’s macroeconomic stability.
According to the Jakarta Interbank Spot Dollar Rate (Jisdor), the rupiah stood at Rp 13,936 against the US dollar on Wednesday, from Rp 13,877 on Monday, a depreciation of 59 points or 0.42 percent.
The decline has been blamed on external factors, namely the broad-based appreciation of the US dollar against other major currencies as the yield of US Treasury bills rose to 3.03 percent, the highest point since 2013.
Analysts have said that it was also caused by investors’ anticipation of a possible move made by the US Federal Reserve to increase the federal fund rate. (bbn)
