Indonesian rupiah hits record low against US dollar as intervention prospect grows
The Indonesian rupiah fell to a record low of 16,640 per dollar on Wednesday. Bank Indonesia signalled it is publicly weighing direct intervention as the currency approaches the psychologically important 16,700 threshold.
Straits Times BusinessIndonesia's currency, the rupiah, reached 16,640 per dollar in Jakarta trading on Wednesday, the lowest level since the Asian financial crisis of 1998. The currency has fallen about 6% since the start of the year. The drop is seen as part of a broader wave of dollar strength affecting emerging markets, alongside the US 10-year yield rising above 4.5% and Brent crude trading above $92.
At the monthly policy meeting on Wednesday, Bank Indonesia Governor Perry Warjiyo said: 'We are watching current levels closely and may intervene directly in spot and forward channels if necessary.' The central bank has sold a total of $9.4 billion since March. ANZ analyst Khoon Goh told Reuters: 'Bank Indonesia may step in to demonstrate its commitment to defending the 16,700 psychological level.'
Finance Minister Sri Mulyani Indrawati announced that a new regulation will be published next week, requiring exporters to keep a larger share of their foreign-exchange earnings in the country. Indonesia already requires natural-resource exporters to keep 50% of foreign-exchange earnings in domestic banks for at least 12 months; that ratio is being considered for a rise to 75%. President Prabowo Subianto will share an economic message with the Indonesian public at the end of the month. This article is not investment advice.
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