Central Bank of Indonesia vows to safeguard rupiah via currency market interventions
Indonesia's Central Bank Plans to Stabilise Rupiah Exchange Rate
In a move aimed at ensuring the stability of the Indonesian currency, the central bank of Indonesia has announced its intentions to control the rupiah exchange rate against the U.S. dollar. The plans, however, remain vague as the bank has yet to disclose further details.
The central bank's chairman, Perry Warjiyo, made the announcement before the market opened on Monday. He stated that the bank will ensure that the movements of the Rupiah against the US Dollar align with the fundamentals of the currency system by using mechanisms such as market interventions.
Warjiyo also indicated that the bank will employ unspecified mechanisms in addition to market intervention. The exact methods have not been revealed, but it is clear that the bank intends to use a combination of strategies to control the rupiah exchange rate.
The announcement comes amidst a turbulent period for the rupiah and the Indonesian stock market. Last Friday, news of protests in Jakarta stung the market, causing fluctuations in both the currency and stock market prices.
Bank Indonesia's head of monetary management, Erwin Gunawan Hutapea, made the comments ahead of Monday's market opening. He reiterated the bank's commitment to basing its actions regarding the rupiah exchange rate on the currency's fundamentals.
While the specific mechanisms the central bank will use to control the rupiah exchange rate remain unclear, it is evident that the bank is taking proactive steps to stabilise the currency. As the situation develops, more details are expected to emerge, providing clarity on the bank's strategies to manage the rupiah exchange rate.
Stay tuned for updates as we monitor the situation closely.
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