JAKARTA ― Indonesia’s central bank intervened in the foreign exchange (FX) market on Friday, a senior official said, as rupiah weakened to its lowest level against the US dollar in more than two weeks.
The head of Bank Indonesia’s (BI) monetary department, Edi Susianto, told Reuters the depreciation was due to stronger-than-expected US economic growth, as well as foreign currency demand from state energy firm Pertamina, which it generally uses to pay for imports and other companies, which are repatriating funds.
On Friday, the rupiah fell as much as 0.31 percent to 16,295 per dollar, its weakest since July 9.
Volatility in the rupiah should only last for a short period, BI director of economic and monetary policy Firman Mochtar said in an interview with Metro TV on Friday.
“We generally still see rupiah going forward as stabilizing with a tendency to strengthen,” he said, adding low inflation and solid economic growth would support the currency.
Inflation is holding inside BI’s target range at 1.5 percent to 3.5 percent, while annual economic growth for the first quarter was at 5.11 percent, in the middle of BI’s target range of 4.7 percent to 5.5 percent for 2024.
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