“BI is making sure of rupiah’s stability,” Nanang Hendarsah, the central bank’s head of monetary management, told Reuters by text message.

“BI is boldly buying bonds in the secondary market and is offering DNDF (domestic non-deliverable forwards) through eight brokers,” he said, adding that intervention was also done in a measured way in the spot foreign exchange (FX) market.

Hendarsah attributed the rupiah's fall in early trade to a drop in China's equities market, which plunged after reopening from a 10-day Lunar New Year holiday amid a rapidly spreading virus epidemic.

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The Chinese yuan and commodities markets in Shanghai slumped on Monday, on fears the coronavirus epidemic will hit demand in the world's second-largest economy. The death toll in China rose to 361 as of Sunday with the number of confirmed cases rising to more than 17,200.

The rupiah fell as much as 0.5 percent to 13,725 per dollar by 0442 GMT. So far this year, it has gained 1.1 percent helped by big inflows.

Indonesia is one of Asia’s higher-yielding markets and has attracted heavy overseas inflows into its bond markets as investors sought better returns in a world of plunging interest rates.​

Indonesia’s benchmark 10-year bond yield jumped to 6.701 percent, from the previous session’s close of 6.645 percent.

The stock market fell 0.5 percent on Monday and is down 6.6 percent since mid-January, making it the second-worst performing in Southeast Asia after Manila so far this year.

BI intervened in bonds, DNDF and spot markets almost daily last week, according to a trader in Jakarta, but the central bank was seen focusing most of its intervention in the bond and DNDF markets.

Indonesia’s one-month DNDF contracts on Monday traded at 13,751 to the dollar, stronger than comparable offshore non-deliverable forwards at 13,840.

The interventions have helped keep the rupiah mostly stable in recent weeks, the trader said, but dollar liquidity in the spot market is tight.

“BI prefers to do their intervention through DNDF now, but most of the offshore traders are seeking dollar in the spot market, which currently is a bit illiquid,” the trader said.

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BI sold DNDF contracts worth more than US$380 million early on Monday, the trader said, adding to around $450 million sold on Friday.

Meanwhile, the central bank believes the pressure on the rupiah is temporary.

“We believe the rupiah’s weakness is temporary because fundamentally, the rupiah will be supported by a narrowing current account deficit, low and stable inflation and resilient growth,” Hendarsah said.