Indonesia Says New York Fed Offers USD60bn Credit Line

• Indonesia’s central bank said the New York Federal Reserve will provide it with a USD60bn repurchase facility to help with liquidity needs amid a dollar shortage triggered by the coronavirus outbreak.
• Bank Indonesia has no plan yet to use the facility, Governor Perry Warjiyo told investors on a conference call. The agreement on the credit line was a vote of confidence in the domestic economy, he said.
• The rupiah has been the hardest hit in Asia in 2020, dropping more than 14% against the dollar, as investors pulled money out of emerging markets and fled to the safe-haven greenback, triggering liquidity shortages.
• Bank Indonesia has taken aggressive steps to stem the fallout, draining USD9.43bn from its foreign reserves last month, according to figures released earlier on 7 Apr 20.
• Indonesia’s reserves of about USD121bn are ample and the Fed’s credit line was a “second line of defense in case we need liquidity in dollars,” Warjiyo said.
• While the central bank still sees room to lower rates, further easing may be risky “amid the current climate” and the bank’s priority is to guard the currency, Warjiyo said.

External Link : https://www.bloomberg.com/news/articles/2020-04-07/indonesia-says-new-york-fed-will-provide-60-billion-credit-line