BI Forex Market Intervention Reduces Rupiah Fluctuations

INDUSTRY.co.id - Jakarta - Bank Indonesia said on Monday afternoon that it was intervening in the forex market to reduce global pressure that weakened the rupiah exchange rate to a new psychological level of Rp. 14,600 per US dollar.

Executive Director of the Head of the Monetary Management Department BI Nanang Hendarsah told Antara in Jakarta on Monday (08/13/2018), said the Central Bank continued to watch the global economic pressures coming. To anticipate the pressure that could be even stronger, BI is preparing to carry out dual interventions with stabilization in the Government Securities (SBN) market.

"BI is stabilizing on the forex market. So far (pressure) can still be controlled, we are trying," said Nanang.

To stabilize the domestic financial market, BI usually intervenes in the forex market, and buys Government Securities (SBN). This is a step often referred to by BI as a dual intervention.

In the spot market at the opening of trading this Monday, the rupiah weakened to 157 points to Rp14,643 compared to the previous position of Rp14,486 per US dollar.

At the Jakarta Interbank Spot Dollar Rate (Jisdor) reference rate announced by BI this Monday, one US dollar is equivalent to Rp. 14,583 per US dollar or shows a rupiah depreciation of 146 points compared to Friday (10/8) which was Rp. 14,437 per US dollar.

The development of the spot market this Monday afternoon at 11:45 WIB, the rupiah traded at IDR 14,612 per US dollar.

Separately, Economist Samuel Aset Manajemen Lana Soelistianingsih said the negative sentiment from Turkey's economic turmoil was one of the factors that made the rupiah plummet, along with other countries' currencies in the world.

Turkey is facing a financial crisis and is a concern of global investors because of the increasingly strong intervention of Turkish President Erdogan to the Turkish Central Bank, and deteriorating relations with the United States.

"The Turkish lira exchange rate recorded a sharp depreciation. The Turkish effect is feared to make the US dollar strengthen and vice versa, other emerging markets including the rupiah will weaken," said Lana.