Bank Indonesia Intervention Lifts Rupiah From Lowest Since 2020

  • Bank Indonesia stepped in to prop up the rupiah for a second day, joining a host of other policy makers which are pushing back against a surging dollar.
  • Indonesian authorities are intervening in the spot and domestic non-deliverable forwards markets to prevent the rupiah from weakening excessively, Edi Susianto, executive director of monetary management, said.
  • The currency erased a loss of as much as 0.3% against the greenback after his comments.
  • Bank Indonesia has deployed its own version of Operation Twist — selling short-term notes and buying up longer ones — in an effort to shore up the rupiah.
  • “It seems like many Asian central banks have become more aggressive in trying to reduce downside pressure on their currencies,” said Mitul Kotecha, head of emerging-market strategy at Toronto Dominion Bank in Singapore. “However, it’s a hard battle given ongoing USD strength.”
  • Bank Indonesia had spent USD4.21bn of its foreign-exchange reserves in Jul 22 as it sought to limit the rupiah’s losses amid the nation’s widening rate gap with the US.
  • The rupiah traded little changed at 15,123 per dollar as at 3.33 p.m. local time after sliding to 15,171 earlier, the weakest since Apr 20.

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