Bank Indonesia Buys Rp195tn Securities to Stabilize Rupiah
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19 March 2020 19:25 WIB
TEMPO.CO, Jakarta - Bank Indonesia (BI) Governor Perry Warjiyo said the central bank continues to monitor rupiah's movement. He said in 2020 alone BI had bought almost Rp195 trillion worth of state securities (SBN) sold by foreign investors.
"And we do that to maintain rupiah stability," Perry said in a live broadcast announcing BI's board of governors' meeting, Thursday, March 19.
The purchase was carried out in spot markets and Domestic Non-Deliverable Forwards or DNDF. He said that global investors are currently facing pressure from the very high uncertainties due to the Covid-19 outbreak.
That, he said, is apparent in how the Dow Jones is plummeting while the risk premium is increasing sharply.
"We, as all countries, have to face the fact that global investors are selling their assets—both stocks and SBN. Now, cash is the king. This is not a fundamental problem, not an economic problem, but because of panic," Perry said of the rupiah slump and market crash.
Therefore, according to Perry, BI continues to maintain the mechanism in the foreign exchange market with triple interventions. "We need to be sure of the rupiah exchange rate in the market is determined—also by brokers, interbanks. This is all convergent and we make sure, from morning to evening, that BI is in the market to maintain confidence and ample liquidity in this difficult situation," he said.
In BI's official website, the Jakarta Interbank Spot Dollar Rate or JISDOR saw the rupiah traded for Rp15,712 per US dollar, down 489 points from yesterday's closing rate of Rp15,223 per US dollar.
Muhammad Hendartyo