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Bank Indonesia open to rate rises
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Bank Indonesia Governor Agus Martowardojo (JP/Wendra Ajistyatama)
B
ank Indonesia (BI) Governor Agus Martowardojo says the central bank is open to increasing its benchmark seven-day reverse repo rate, which is currently at 4.25 percent, if the pressure on the rupiah continues.
“If the pressure on the rupiah persists and potentially disrupts financial-system stability, BI will not reject the option of increasing the reference rate,” said Agus during a press conference in Jakarta on Thursday as reported by kompas.com.
However, he stressed that if BI had to increase the rate, it would be implemented very carefully and would refer to the latest developments.
He said the depreciation not only hit the rupiah but also affected most of the currencies of both developed and developing countries as a result of the improvement in the United States economy and the strengthening of the US dollar given the possibility of four increases in the US Fed Fund Rate this year, he said, adding that the fundamentals of the Indonesian economy were sound.
He stressed that the central bank would always monitor the market closely and would conduct market intervention to stabilize rupiah. (bbn)
