JAKARTA - Bank Indonesia (BI) has reaffirmed its commitment to maintaining the stability of the rupiah exchange rate amid increasing pressure from the strengthening of the US dollar.
This step is taken as part of efforts to keep inflation under control while supporting sustainable national economic growth.
The rupiah exchange rate in recent days is still under pressure, based on Bloomberg data, on Wednesday, July 29, at 09.20 WIB, the spot rupiah exchange rate weakened 0.09 percent to the level of Rp18,100 per US dollar.
"In the midst of high global uncertainty, the stabilization of the rupiah exchange rate continues to be strengthened so that it consistently supports the achievement of inflation targets and encourages economic activities," said Senior Executive Director, Head of the Monetary and Asset Management Department of Securities, Bank Indonesia, Erwin Gunawan Hutapea in his statement, Wednesday, July 29.
He said BI would continue to optimize the mix of monetary policy to maintain economic stability amid high global uncertainty.
According to Erwin, strengthening the stabilization of the rupiah exchange rate is not only carried out through the benchmark interest rate policy, but also by optimizing various monetary instruments.
He explained that it included a triple intervention strategy in the foreign exchange market which includes the spot market, Non-Deliverable Forward (NDF), and Domestic Non-Deliverable Forward (DNDF), as well as the optimization of the Indonesian Bank Rupiah Securities (SRBI) instruments which are supported by swap incentive facilities and DNDF hedging.
"It will continue to be optimized to maintain exchange rate stability while supporting the inflow of foreign capital," he explained.
In addition, Erwin said BI also strengthened the liquidity management strategy in the money market and the banking sector.
He added that the issuance of SRBI in the future will be adjusted to the needs of liquidity management to continue to support exchange rate stability and increase the attractiveness of foreign portfolio investment.
On the other hand, Erwin said Bank Indonesia continues to optimize policies that are oriented towards economic growth.
He added that the strengthening of the implementation of the Macroprudential Liquidity Incentive Policy (KLM) was carried out to encourage the distribution of financing to priority sectors, as well as strengthening the liquidity redistribution mechanism in the financial sector so that the transmission of financing becomes more effective.
"In addition, the policy of digitizing the payment system is also continuing to be accelerated so that it further encourages economic growth," he said.
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