JAKARTA (Reuters) – Bank Indonesia (BI) will strengthen measures to stabilise the rupiah’s exchange rate so it reflects the currency’s fundamental value, a policy intended to mitigate against imported inflation, the country’s finance minister said on Friday.
Sri Mulyani Indrawati made the comment as the chair of Indonesia’s Financial System Stability Committee, which comprises the finance ministry, the central bank, the Financial Services Authority and the deposit insurance corporation.
“Going forward, rupiah exchange rate stabilisation measures will be strengthened so that it is in line with its fundamentals and it supports efforts to control imported inflation,” she said at a press conference.
Last month, the central bank unexpectedly raised interest rate by 25 basis points to 6% with an aim to defend the rupiah and mitigate against imported inflation.
The rupiah had been weakening against the U.S. dollar in September and October, falling to its weakest level since 2020. However, the Federal Reserve’s decision on Wednesday to keep U.S. rates unchanged has reversed some of the losses.
BI Governor Perry Warjiyo is expected to address the same press conference later on Friday.
(Reporting by Stefanno Sulaiman; Editing by Kanupriya Kapoor)