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.