The Jakarta Post
President Joko “Jokowi” Widodo praised on Tuesday Bank Indonesia (BI) for successfully stabilizing the rupiah exchange rate amid tough external pressures on the currency.
The President was particularly impressed by BI’s move to increase the seven-day reserve repo rate ( 7DRRR ) by 25 basis point to 6 percent on Nov. 16, a bold move, to defend the currency.
“The BI governor made a bold move. […] It was a surprising move that was positively welcomed by the market,” Jokowi said during BI’s annual meeting in Jakarta.
“Congratulations to the BI governor and the BI staff. Amid the global fluctuation, BI managed to defend the rupiah exchange rate. We realize how hard our struggle is day by day, week by week and month by month.”
The rupiah’s exchange rate dropped to lower than Rp 15,000 per United States dollar in October, the lowest level in the last 20 years, sparked, in particular, by the trade war between the US and China and the normalization of the US monetary policy.
In trying to defend the rupiah, BI raised its 7DRRR six times since May by a total of 175 bps. The central bank also carried out market intervention anytime the rupiah’s exchange rate weakened significantly.
“The central bank intervened in the market and increased the key rate to stabilize the rupiah against the US dollar. Now, the rupiah has strengthened significantly. Its exchange rate now stands around Rp 14,500 per US dollar,” Jokowi said. (bbn)