Bank of Indonesia Expects Rupiah to Strengthen
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Bank Indonesia expects the rupiah to continue to strengthen and currency market volatility to subside as market price in expected US Federal Reserve’s interest rate hikes, a senior official said on Wednesday (14/03).
“The fundamental level of an exchange rate is not a fix level, but I can say that the current level is not [the rupiah’s] fundamental and it should be stronger than now,” said Doddy Zulverdi, who heads the monetary management department at Bank Indonesia (BI) and is also one of the candidates to become a member of BI’s board of governors.
Doddy reiterated BI’s commitment to intervene in the market to guard the rupiah against volatility. He said the recent weakness has had limited impact on exports, but has likely had a bigger effect on holding back imports.
The rupiah touched a two year low of 13,800 a dollar earlier this month. It was trading at 13,731 per dollar on 0400 GMT Wednesday.
Questions & Answers
Q.Which official from Bank Indonesia made these statements about the rupiah?
Which official from Bank Indonesia made these statements about the rupiah?
Doddy Zulverdi, who leads Bank Indonesia's monetary management department and is a candidate for its board of governors, made these statements.
Q.What is Bank Indonesia's stance on intervening in the currency market?
What is Bank Indonesia's stance on intervening in the currency market?
Bank Indonesia is committed to intervening in the market to protect the rupiah from volatility. This commitment aims to stabilise the currency.
Q.What impact has the recent weakness of the rupiah had on Indonesia's trade?
What impact has the recent weakness of the rupiah had on Indonesia's trade?
The recent rupiah weakness has had a limited effect on exports, but it has likely had a more significant impact on restraining imports.
Q.What was the rupiah's lowest exchange rate against the dollar recently?
What was the rupiah's lowest exchange rate against the dollar recently?
The rupiah reached a two-year low of 13,800 per dollar earlier this month. On Wednesday, it was trading at 13,731 per dollar.
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