Jakarta (VNA) – Bank Indonesia (BI) Governor Perry Warjiyo announced that President Prabowo Subianto has officially approved seven major intervention strategies aimed at strengthening and stabilising the rupiah, which has come under severe depreciation pressure in recent days.
Speaking at a press conference following an emergency meeting between the President and the Financial System Stability Committee (KSSK) on the evening of May 5, Perry said BI possesses ample resources to support the currency. Referring to the first strategy of intensifying foreign-exchange market intervention, both onshore and offshore, he stressed that Indonesia’s foreign exchange reserves are more than sufficient to stabilise the rupiah.
To address capital outflows, the second and third strategies focus on issuing Rupiah Securities (SRBI) to attract foreign capital and offset withdrawals from the stock market and government bonds (SBN). BI will also coordinate closely with the Finance Ministry. Since the beginning of this year, the central bank has purchased 123.1 trillion IDR (nearly 7.5 billion USD) worth of SBN from the secondary market.
Notably, to curb foreign currency speculation and hoarding, the fourth and fifth strategies involve tightening limits on US dollar purchases in the domestic market for transactions lacking supporting underlying assets. The monthly ceiling for dollar purchases has been reduced from 100,000 USD to 50,000 USD per person.
Perry also said that BI is preparing to further lower the limit to 25,000 USD, under which all dollar purchases from 25,000 USD upward would require proof of underlying assets. At the same time, BI reaffirmed its commitment to maintaining accommodative liquidity for the banking system.
To diversify intervention tools, the sixth strategy allows domestic banks to sell offshore non-deliverable forwards (NDFs) to boost foreign currency supply.
Finally, the seventh strategy focuses on systemic risk control. BI will work with Indonesia’s Financial Services Authority (OJK) to dispatch inspection teams to banks and business groups recording unusually high USD purchases in order to safeguard national financial security./.
