BI Prepares Market Intervention to Defend Rupiah

Bank Indonesia (BI) is preparing a market intervention scheme to defend the weakening rupiah, which was quoted above 13,800 against the US dollar on Thursday morning.

“We have started looking into all the data. Since early in the morning [ the rupiah] was under pressure, therefore we were preparing to stabilize it,” said the BI’s monetary management department head, Doddy Mulverdi, in Jakarta on Thursday as quoted by tempo.co.

The rupiah rebounded and closed at 13,748 against the dollar on Thursday evening.

Doddy, however, refused to reveal the intervention strategy, which had been prepared by the central bank. “The intervention strategy, volume of intervention, etc. are part of internal strategy,” he added.

Previously, the assistant to BI’s economic and monetary policy department head, Dody Budi Waluyo, said Federal Reserve chief Jerome Powell’s speech on the performance of the country’s economy had sparked negative sentiment against Indonesia’s currency.

Securities firm Binaartha Sekuritas analyst Reza Priyambada explained market players had released the currencies of developing countries, including the rupiah, after Powell’s optimistic speech, which also indicated the Fed’s plan to increase its reference rate.

Meanwhile, BI Governor Agus Martowardojo said the rupiah`s exchange rate would continue to be volatile until the Fed announced its reference rate policy on March 20 or 21.

Courtesy : The Jakarta Post