Bank Indonesia (BI) intervened in the spot interbank foreign exchange market to smooth volatility in the rupiah exchange rate, said the central bank’s Head of Monetary Management Nanang Hendarsah on Wednesday.
USD/IDR rallies hard on intervention
In a knee-jerk reaction to the intervention report, the Indonesian rupiah plunged over 1.50% against the US dollar, driving USD/IDR to the highest levels in nine days at $14,820.
The bounce in the spot can be also attributed to the recovery in the US dollar across its main peers, in the wake of the upbeat US ISM Manufacturing PMI.
At the press time, USD/IDR is off the highs and trades at 14,785, still up 1.51% on the day.
Separately, BI Deputy governor, Dody Budi Waluyo, said in a Fitch Ratings online conference, “we believe rupiah is fundamentally undervalued due to low inflation, narrow current account deficit.”
Additional quotes
“To maintain rupiah stability, keeps “accomodative” policy stance.”
“Burden-sharing” scheme with govt is a one-off policy.”
“2020 year-end inflation seen around 2%, the current deficit below 1.5% of GDP.”
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