Forex
Home›Forex›Major Pairs›Rupiah holds near 18,110 as Bank Indonesia broadens ma…
Rupiah holds near 18,110 as Bank Indonesia broadens market stabilization
Bank Indonesia is using spot FX intervention, NDFs and rupiah-denominated securities, after 100 basis points of rate hikes since May.
The Indonesian rupiah is holding near 18,110 against the US dollar, with USD/IDR edging slightly higher after a bearish opening gap, according to FXStreet.
The central bank, Bank Indonesia, cited an expanded toolkit to stabilize markets following the unexpected departure of Governor Perry Warjiyo. It said the policy mix goes beyond benchmark interest rates, including direct spot foreign exchange intervention, onshore and offshore non-deliverable forwards, and issuing rupiah-denominated securities to manage liquidity and draw foreign capital, building on 100 basis points in rate hikes implemented since May.
FXStreet added that the dollar could strengthen further if the Federal Reserve takes a more hawkish stance. While the Fed kept rates unchanged in the 3.5% to 3.75% target range at its July meeting, the decision showed a hawkish split, with Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, and Minneapolis Fed Chief Neel Kashkari all dissenting in favor of a 25 basis point hike.
According to FXStreet, uncertainty is also being influenced by escalating Middle East geopolitical tensions and stalled negotiations tied to Iran’s position on control of the Strait of Hormuz, with Warsh describing a firm commitment to the Fed’s 2% inflation target.