JAKARTA: According to its governor, Indonesia’s central bank intervened in the foreign exchange market on Friday, June 14, to support the rupiah. The governor also promised to use monetary policy to stabilize the currency after it dropped to levels not seen in more than four years versus the dollar. In afternoon trade, the rupiah fell 0.9% to 16,415 per dollar, its lowest level since April 2020, before partially recovering its losses.
Governor Perry Warjiyo of Bank Indonesia (BI) informed reporters that in addition to other measures, the central bank intervened in the foreign exchange market to stabilize the currency. He made hints that the bank had stepped in during the day, but he wouldn’t say when. According to Warjiyo, the rupiah was “stable” and depreciated at a slower rate than other emerging market currencies, such as the South Korean won and Thai baht.
“We are keeping up our efforts to stabilize the rupiah. We’ve accomplished a lot, whether it be through intervention or drawing in foreign capital, and everything has gone smoothly,” he remarked. In April, BI surprised everyone by raising interest rates due to a steep decline in the rupiah’s value.
According to Bank Permata economist Josua Pardede, the most recent decline in the currency lessened the likelihood that BI would switch to monetary easing measures anytime soon, but it does not imply that it will hike again at its following policy review on June 19–20.
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