Middle East Conflict Heats Up, Bank Indonesia Strengthens Market Interventions

Bank Indonesia continues to monitor the latest developments in the Middle East following the escalation of the conflict after the United States attack on Iran which triggered risk off sentiments in global financial markets.

"In line with the escalation of the conflict in the Middle East after the US attack on Iran which has encouraged risk-off sentiment in global financial markets," said Head of the Monetary and Asset Management Department of Securities (DPMA), Bank Indonesia Erwin Gunawan Hutapea in his statement, Monday, March 2.

The increased global uncertainty has the potential to affect the movement of financial markets, including the rupiah exchange rate.

Therefore, Erwin said Bank Indonesia will respond to market dynamics appropriately to ensure that the rupiah exchange rate continues to move in accordance with economic fundamentals.

As part of the stabilization measures, he added that Bank Indonesia will continue to be present in the market through various intervention instruments, both through Non-Deliverable Forward (NDF) transactions in the foreign market and spot transactions and Domestic Non-Deliverable Forward (DNDF) in the domestic market.

"BI will also continue to optimize policies to increase the effectiveness of the transmission of interest rate policy," he said.