Indonesia spends around 796 mln USD to save currency amid sharp plunge against U.S. dollar

Source: Xinhua| 2018-09-05 22:25:18|Editor: Yurou
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JAKARTA, Sept. 5 (Xinhua) -- Indonesia has gradually spent in total of 11.9 trillion rupiah (about 796.7 million U.S. Dollars) to reduce the pressures from depreciated value of national currency rupiah against the U.S. dollar at present through several market operations, Indonesian central bank (BI) governor said here on Wednesday.

The operations were carried out by buyback mechanism on Indonesian notes (SBN) sold by foreign investors in the last several days, BI Governor Perry Warjiyo said.

The buybacks were conducted on Thursday at 3 trillion rupiah (about 200.8 million U.S. dollars), Friday at 4.1 trillion rupiah (about 274.5 million U.S. Dollars), Monday at 3 trillion rupiah (about 200.8 million U.S. Dollars) and Tuesday at 1.8 trillion rupiah (about 120.5 million U.S. dollars), he added.

"Our focus now is stabilization," Perry said in a hearing with legislators in the parliament.

The buyback mechanism was part of the central bank's intervention to respond the rupiah exchange rate against U.S. dollar, which has developed into a level far from its fundamental range, he said.

Besides the buybacks, BI also conducted interventions in forex trade by assuring sufficient supplies of forex in the country as well as creating regulation to reduce the costs for firms planning to apply hedging mechanism in their forex asset so as to prevent its value from plunging further, he added.

BI also intensified its communications with firms particularly in encouraging them to put their export revenues in domestic market and preventing them to buy huge sum of forex for speculations purposes.

Indonesian currency is facing challenging situation as rupiah exchange value has drastically dropped if compared to the U.S. dollars to around 15,000 rupiah per 1 U.S. dollar.

Perry said the sharp currency value depreciation in Indonesia was generated by external factors that include the ensuing global economy downturns, coupled with the developing trade tensions.