BI won't impose capital controls

BI won't impose capital controls

SINGAPORE (Dow Jones): A high-level delegation from Bank Indonesia told Singapore-based bankers that the Indonesian central bank would not impose controls on capital flows, the Business Times reported Wednesday.

Bank Indonesia Deputy Governor Anwar Nasution conceded that new restrictions on movement of rupiah offshore represented a "ban" on the internationalization of the currency.

But he told the Business Times that such a policy didn't constitute a form of capital controls.

The delegation, led by Senior Deputy Governor Miranda Goeltom, met with Monetary Authority of Singapore officials and members of the Singapore Foreign Exchange Market Committee on Monday.

Goeltom told the Business Times that the delegation's purpose was to assure bankers that "we are not introducing capital controls."

"We have no intention to introduce a fixed exchange rate system. We have no intention to introduce the slightest type of control. We do believe that a free floating exchange rate system is the most appropriate mechanism to target inflation," she said.

Goeltom added that the delegation didn't discuss the creation in Singapore of a market to trade rupiah non-deliverable forward contracts.