BI Spends Rp11.9 Trillion on Stabilizing Rupiah

Jakarta, MINA — Bank Indonesia (BI) has spent Rp11.9 trillion on easing the pressure on the rupiah by meddling in the secondary market and buying back state securities (SBN) from foreign investors, Antara News reported.

The buyback operation involved Rp3 trillion on Thursday (Aug 30), Rp4.1 trillion on Friday (Aug 31), Rp3 trillion on Monday (Sept 3), and Rp1.8 trillion on Tuesday (Sept 4).

“We bought back SBN on Thursday and Friday last week and Monday and Tuesday this week,” BI Governor Perry Warjiyo said at a meeting with the House of Representatives (DPR) Commission XI here on Wednesday.

The operation is part of BI`s dual intervention, in which the central bank meddled in the SBN market when the rupiah`s exchange rate was far from its fundamental level, he noted.

BI also intervened in the foreign currency market to ensure that the supply of foreign currencies is adequate, he added.

“We are currently focusing on stabilizing (the rupiah),” he remarked.

Besides launching the market operation, BI also asked business people to put much of their foreign exchange earnings from exports in domestic banks and not to buy large quantities of dollars for speculation.

He expressed hope they would buy dollars according to their needs. Hence, BI has tried to lower costs of foreign currency barter and hedging to prevent them from buying dollars in large quantities.

The rupiah was still under pressure on Wednesday evening, moving to the level of Rp14,922 per dollar.

Since early this year, the rupiah has dropped 8.2 percent against the dollar. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)