By Ying Xian Wong
Bank Indonesia said it will deploy "smart intervention" in the foreign exchange market to support the rupiah, which has fallen to a record low against the U.S. dollar.
"Bank Indonesia will remain committed to staying in the market through 'smart intervention' in the spot market, domestic and offshore non-deliverable forward markets, alongside optimizing monetary operations to help reduce pressure on the rupiah," Senior Deputy Governor Destry Damayanti said in a statement dated Tuesday.
The central bank didn't elaborate on "smart intervention."
Rupiah pressure has increased recently due to escalating Middle East tensions, which have pushed up oil prices and heightened global uncertainty, she said.
Domestically, seasonal U.S. dollar demand, driven by external debt repayments, dividend outflows and Hajj-related payments, has added to pressure in the foreign exchange market, she added.
The dollar rose to 17,525 rupiah on Wednesday, after hitting a record high of 17,535 rupiah in early trading, LSEG data showed.
However, Bank Indonesia highlighted improving foreign investor confidence, with inflows into domestic government bond markets reaching 61.6 trillion rupiah in April. Foreign exchange liquidity remains ample, supported by 10.9% year-to-date growth in foreign currency deposits as of end-March, BI said.
The central bank expects these seasonal pressures to ease, with the rupiah likely to return toward its fundamental level over time.
Write to Ying Xian Wong at yingxian.wong@wsj.com
(END) Dow Jones Newswires
05-12-26 2343ET
