Rupiah Sinks Beyond 18,000 as Perry Exit, Fed Jitters Grip Markets
Jakarta. Indonesian rupiah extended its decline on Tuesday morning, slipping past the psychologically important 18,000-per-dollar level as investors continued to digest Bank Indonesia Governor Perry Warjiyo's resignation while awaiting the US Federal Reserve's policy decision.
Bloomberg data showed the rupiah weakening 65 points, or 0.36%, to Rp 18,074 per US dollar at 9:05 a.m. Jakarta time in the spot market. The currency had already fallen 46 points, or 0.26%, to Rp 18,009 per dollar at Monday's close.
Acting Bank Indonesia Governor Destry Damayanti sought to reassure investors that the central bank would maintain its existing policy mix to safeguard financial system stability, support the rupiah, and sustain economic growth.
"We hope the market will not panic because Bank Indonesia will continue implementing the same policies we have pursued so far," Destry said after a meeting on Monday.
She stressed that stabilizing the rupiah remains the central bank's top priority and said Bank Indonesia would continue intervening in the foreign exchange market through spot transactions, Domestic Non-Deliverable Forwards (DNDF), and Non-Deliverable Forwards (NDF).
"We will remain active in the market through spot, DNDF, and NDF interventions. At the same time, we will continue our pro-growth policies through our macroprudential measures," Destry said.
The market's attention is also turning to the Federal Reserve, which is scheduled to conclude its policy meeting on Wednesday US time. Several global brokerage firms have begun warning that the Fed could resume raising interest rates after this month's surge in oil prices and escalating geopolitical tensions in the Middle East.
Investors are now awaiting the Fed's decision for clearer direction on the US dollar and emerging market currencies, including the rupiah, in the near term.
Meanwhile, other major currencies traded against the rupiah as of 10:05 a.m. Jakarta time were the Singapore dollar at Rp 13,996, the Japanese yen at Rp 110.43, the Australian dollar at Rp 12,646, and the euro at Rp 20,572.
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