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Jakarta Post

New BI governor seeks to maintain rupiah stability

  • Marchio Irfan Gorbiano

    The Jakarta Post

Jakarta   /   Thu, May 24, 2018   /   01:14 pm
New BI governor seeks to maintain rupiah stability Coordinating Economic Minister Darmin Nasution (right) congratulates newly inaugurated Bank Indonesia Governor Perry Warjiyo after his inauguration ceremony in Jakarta on May 24. (Antara/ Sigid Kurniawan)

Maintaining the stability of the rupiah will be a short-term priority for Bank Indonesia, said newly inaugurated BI Governor Perry Warjiyo after his swearing in ceremony at the Supreme Court in Jakarta on Thursday.

Perry replaced Agus Martowardojo, who has retired from his position in the central bank. Perry will take the helm of the central bank for the 2018 to 2023 period.

Perry said BI would prioritize its monetary policy to stabilize the rupiah, including by adjusting its reference rate – the seven-day reverse repo rate.

Under his leadership, he added, the central bank would become more preemptive in its search for stability amid pressures facing the currency. “We are planning to become more preemptive, frontloading, more ahead of the curve in the interest rate response,” said Perry.

The central bank decided to raise its policy rate by 25 basis points (bps) to 4.5 percent during its monthly board of governors meeting in May. It also signaled further hikes to maintain the stability of the economy.

Perry also said the central bank would continue its dual intervention policy to stabilize the rupiah by supplying forex to the monetary market to maintain liquidity in the market and buying the government’s debt papers in the secondary market.

He said the central bank had shelled out almost Rp 50 trillion (US$3.52 billion) to date to purchase the government’s bonds that were sold by its foreign owners.

Perry added the central bank would strengthen its coordination with the government and the Financial Services Authority (OJK) to discuss policy measures to stabilize the rupiah. (bbn)