(Bloomberg) -- Indonesia said it intervened aggressively in the market to curb the rupiah’s decline as the currency weakened past the key psychological level of 16,000 against the dollar.
“We entered the market with a quite bold triple intervention,” Edi Susianto, executive director for monetary and asset securities management at Bank Indonesia said in text message Friday. Authorities entered the spot, domestic non-deliverable forward and government bond markets to maintain market confidence, he said.
The rupiah dropped 0.5% to 16,002 per dollar on Friday. The depreciation is driven by global sentiment, with the dollar strengthening on the back of a resilient US economy and escalating geopolitical tensions, Susianto said.
“The rupiah might have some more space to go, before BI feels the need to come down strong,” said Mingze Wu, currency trader at StoneX Financial Pte Ltd in Singapore. “If the Fed is more dovish than expected, BI might not even need to do anything — let the Fed do the job for them.”
The rupiah has slumped more than 5% this quarter, as the resurgent dollar battered Asian currencies. A Bank Indonesia rate cut that most economists expect to come as early as next week could add more pressure to the rupiah.
Bank Indonesia, which has repeatedly said it is intervening to curb volatility in the rupiah, had said its fundamental level is stronger than 16,000 per dollar.
--With assistance from Malavika Kaur Makol.
(Updates with analyst comment)
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