(Bloomberg) -- The Indonesian rupiah erased its early losses after the central bank intervened in the foreign-exchange market and pledged to boldly guard the currency.
“We will guard the rupiah boldly to build market confidence,” Bank Indonesia Executive Director for Monetary and Asset Securities Management Edi Susianto said on Friday. The central bank is intervening in the spot, domestic non-deliverable forward and secondary government bond markets to support rupiah, he said.
The rupiah was up 0.2% to 16,262 against the greenback as of 10:15 a.m in Jakarta. In early morning trading, it had weakened as much as 0.1% to 16,305 per dollar, the lowest in more than four months.
Bank Indonesia attributed the weakness to global sentiment and bets of fewer Federal Reserve interest-rate cuts next year.
“The intervention is expected to stem rupiah losses,” said Myrdal Gunarto, an analyst at PT Maybank Indonesia in Jakarta, adding that the central bank may remain in the market through the year-end.
The currency could also get some support in the coming days as investors buy local assets to window-dress their portfolio, he said.
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