Bank Indonesia committed to strengthening efforts to stabilise rupiah

[JAKARTA] Indonesia’s central bank said in a statement on Wednesday (Jul 29) that its efforts to stabilise the rupiah will be strengthened in order to achieve inflation targets and encourage economic activities.

In a statement, Bank Indonesia’s (BI) head of monetary management Erwin Gunawan Hutapea, said that BI does not only rely on interest rates to support the rupiah. It uses a policy mix that includes other instruments such as intervention in the spot FX market and both onshore and offshore non-deliverable forwards.

BI is also committed to efforts to maintain adequate liquidity in the money market and banking system.

Issuance of BI rupiah-denominated securities, known as SRBI, will be aligned with liquidity management needs and will support foreign capital inflows to contribute to rupiah stability.

BI will also ensure an even distribution of liquidity in the financial sector.

The statement comes after the rupiah has weakened past 18,000 per US dollar this week after the resignation of BI governor Perry Warjiyo on Monday renewed investor questions about the central bank’s independence. REUTERS