INDONESIA’S central bank said it is intervening in the market to help steady the rupiah and is open to buying government bonds to help stabilise the bond market.
The rupiah extended losses by 0.28 per cent on Wednesday (Apr 17) to 16,215 per dollar, its weakest in four years, after dropping 2.08 per cent a day earlier when the Indonesian market reopened after Eid Al-Fitr holidays.
Senior deputy Bank Indonesia governor Destry Damayanti said the recent rupiah weakness is mainly due to global market conditions and that the domestic economy remains resilient.
The central bank is intervening in the spot foreign exchange market, non-deliverable forwards and, “when needed, we will support the government bonds,” she said.
“We need to reassure the market and show them that we are with them in the market to continually maintain rupiah stability,” Destry said.
The yield on Indonesia’s benchmark 10-year bond shot to 7.037 per cent earlier on Wednesday, its highest since November, before steadying at around 6.964 per cent.
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Destry added there is “nothing wrong” with the domestic economy and that there is enough dollar liquidity in the market, backed by ample foreign exchange reserves. REUTERS
