The aggressive move comes as the Indonesian currency is challenged by\nescalating Middle East tensions, high global energy prices and seasonal\nsurge in domestic corporate demand for foreign currency, according to BI\nSenior Deputy Governor Destry Damayanti.<\/p>\n
\u201cBank Indonesia continues to be present in the market and is\nincreasing the intensity of its interventions to ensure that market\nmechanisms operate smoothly and the stability of the rupiah exchange\nrate is maintained,\u201d Damayanti said in her statement on Thursday.<\/p>\n
To anchor the currency, BI is restructuring interest rates on its\nmonetary instruments to offer more competitive yields, aiming to lure\nforeign portfolio capital back into domestic assets.<\/p>\n
The central bank\u2019s ongoing intervention strategy is being executed\nconsistently across multiple fronts. This includes Non-Deliverable\nForward (NDF) transactions in offshore markets, direct spot transactions\nand Domestic Non-Deliverable Forward (DNDF) transactions within the\ndomestic market.<\/p>\n
Furthermore, BI is actively purchasing Government Securities (SBN) in\nthe secondary market to anchor bond yields.<\/p>\n
The rupiah\u2019s sharp slide - amounting to a -7.44 percent depreciation\nyear-to-date - mirrors a broader sell-off across emerging Asian\nmarkets.<\/p>\n
Damayanti attributes the weakness primarily to geopolitical friction\nin the Middle East, which has disrupted peace prospects and kept global\ncrude oil prices high. For Indonesia, elevated energy costs have stoked\nfears of global inflation and triggered rapid capital flight toward\nsafe-haven assets.<\/p>\n
On the domestic front, a seasonal surge in foreign exchange demand\nhas added to the pressure, driven primarily by multinational\ncorporations repatriating dividends and local entities processing\nforeign debt payments.<\/p>\n
Despite the recent downward pressure, Damayanti reassured the public\nand market players that Indonesia\u2019s financial defenses remain robust\nwith foreign exchange reserves stood at a stable US$146.2 billion at the\nend of April.<\/p>\n
As a long-term buffer against the volatility of the US dollar, BI\ncontinues to aggressively promote its Local Currency Transaction (LCT)\nframework for cross-border trade.<\/p>\n
To date, Indonesia has established bilateral LCT partnerships with\nkey trading partners, including China, Japan, Malaysia, Thailand, South\nKorea and the United Arab Emirates.<\/p>\n
\u201cThe diversification of trade transactions through the LCT scheme\ncontinued to increase in April, reaching around US$22.7 billion,\ncompared to US$25.7 billion recorded for the entirely of the previous\nfiscal year,\u201d Damayanti revealed.<\/p>\n
Related news: Indonesia moves to stabilize rupiah amid market\nvolatility<\/p>\n
Related news: Purbaya confident natural resources reform to help\nstabilizing rupiah<\/p>\n
Translator: Rizka Khaerunnisa, Yashinta Difa<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/bi-ramps-up-market-intervention-as-rupiah-hits-rp18-000-per-us-dollar-1780566609", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }