Indonesia's central bank has taken action to maintain the stability of the rupiah and prevent excessive volatility after the currency fell to a new record low against the US dollar, according to a statement from Senior Deputy Governor Destry Damayanti on Tuesday.
"Stabilizing the rupiah exchange rate is undoubtedly our top priority at the moment. We will use all available tools and policies and go all out," she stated. She added that the pressure on the rupiah stems mainly from the global situation, including market reactions to the conflict between the US and Iran.
Data from LSEG showed the rupiah fell by as much as 0.35% against the dollar to 17,090 during Tuesday's trading session. So far this year, the rupiah has depreciated more than 2% against the dollar, broadly aligning with the trend of some other regional currencies.
Destry indicated that the central bank has intervened in both the spot and non-deliverable forward foreign exchange markets. It is also prepared to purchase government bonds in the secondary market if necessary. Authorities will further aim to increase capital inflows by enhancing the attractiveness of rupiah-denominated securities, specifically SRBI.
She noted that while a weak rupiah will undoubtedly have a negative impact on economic activity, rising prices for the country's key commodities will help to offset this effect.
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