ASEAN KEY DESTINATIONS
Rupiah falls after intervention
The currency reached a three-year high on Monday after the Group of 20 nations pledged over the weekend to refrain from weakening their currencies.
Bank Indonesia sees the rupiah's "fundamental" level at 8,900 to 9,300 against the US dollar, Governor Darmin Nasution said on Wednesday. The central bank will "guard" the rupiah at its fundamental level and buy foreign currencies to control the local currency's volatility, he said.
"The authorities don't seem keen to allow for substantial exchange-rate appreciation," Taimur Baig, chief economist at Deutsche Bank in Singapore, the world's biggest currency trader, wrote in a note on Wednesday."
As equity and bond market rallies continue and the rupiah remains under sustained appreciation pressure, the risk of capital controls is rising."
The rupiah weakened 0.3 percent to 8,943 per dollar as of the market's close in Jakarta.
The currency has gained 5 percent this year and reached 8,896 on Monday, its strongest level since June 2007.
Bank Indonesia has intervened to prevent the rupiah from becoming too strong, Deputy Governor Halim Alamsyah said on Friday without elaborating.
Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.
Indonesia's local-currency bonds are this year's best performers among Asia's 10 biggest economies excluding Japan, returning 25 percent, according to HSBC Holdings.
Comment on this Article. Send them to firstname.lastname@example.org
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below