Bank Indonesia ready to intervene in currency market after rupiah depreciates for 6 consecutive days

“Bank Indonesia” reveals readiness to intervene in foreign exchange, futures and domestic bond markets after the rupiah depreciates for 6 consecutive days

On October 7, 2567, Bloomberg News reported that the Indonesian central bank said it was ready to support the rupiah, which was in its longest continuous decline since 2566.

Adi Susiento, Executive Director of Financial Management , said the Bank of Indonesia is ready to intervene in the domestic foreign exchange, forward, and bond markets to maintain a balance between currency supply and demand.

Susian's comments come as currencies are on track for a sixth straight day of weakness, with the rupiah and other emerging market currencies coming under downward pressure as signs of a recovery in the US economy support the dollar.

Suciento stated, "Global market developments are unfavorable for developing country currencies, including the rupiah, due to escalating tensions in the Middle East and better-than-expected recent US employment data."

The rupiah fell 1.3 percent to 15,685 per dollar on Monday, having appreciated more than 8 percent in the quarter ended September, on expectations that the US Federal Reserve will continue its aggressive interest rate cuts after a recent half-percentage point cut.

Indonesia's central bank has sufficient resources to support the rupiah, with foreign exchange reserves remaining near record highs. These reserves stood at $1.499 billion in September, covering imports and foreign debt repayment needs for 6.4 months.

The weakening of the rupiah has fuelled speculation that the Reserve Bank of India may keep interest rates unchanged at its October 16 meeting after a surprise rate cut in September.

Reference: bloomberg.com

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