Rupiah Weakening is Reaction to FOMC Decision

Bank Indonesia Governor Agus Martowardojo has said that the further depreciation of the rupiah on Thursday was a reaction to a decision made by The Federal Open Market Committee (FOMC) to maintain the federal funds target range at 1.5 to 1.75 percent.

According to the Jakarta Interbank Spot Dollar Rate (JISDOR), the rupiah stood at Rp 13.965 against the US dollar on Thursday, a slight change from Rp 13,936 on Wednesday.

The rupiah was at its weakest since 2015 when it was quoted at Rp 14,032 per US dollar on Dec. 18, 2015.

“The US economy is improving. Its employment is improving. All markets react. It affects the whole world, including the rupiah,” said Agus on Thursday, as reported by kontan.co.id.

He said the central bank would always intervene in the market if the rupiah was under pressure and that BI would continue to monitor the market and discuss the issue during BI’s board of governors meeting on May 16-17.

“We in the central bank will keep the rupiah’s volatility at an acceptable level and BI guarantees the liquidity of both foreign exchange and the rupiah. A bit of volatility reflects BI’s commitment to applying a flexible exchange rate,” Agus added.

He said that BI’s presence in the market could come in the form of a swap auction and that the central bank could also purchase government debt papers.

Courtesy : Thejakartapost
Photo : PUBinfo

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