Indonesia central bank says rupiah fall due to impact of Fed outlook

INDONESIA’S central bank said the rupiah’s sharp fall to fresh four-months on Thursday was due to the impact of the US Federal Reserve’s policy outlook, and said it would act to stabilise the currency against any excessive volatility.

Fitra Jusdiman, a director at Bank Indonesia’s Monetary and Securities Asset Management Department, told Reuters that markets had perceived the Federal Reserve to be more hawkish than they had expected in its policy review overnight.

“From time to time we will always monitor and make stabilisation efforts in a measured and timely manner,” he said.

The rupiah had weakened by as much as 1.12 per cent to 16,265 per dollar as of 0253 GMT, its lowest level since Aug 2.

The drop came despite BI holding interest rates steady at its own review on Wednesday as it focused on supporting the rupiah against increasing global economy uncertainty.

BI Governor Perry Warjiyo said that Donald Trump’s planned tariffs and rising geopolitical tensions are expected to slow global growth next year and fuel inflation. REUTERS