Jakarta (TheInsiderStories) – Bank Indonesia (BI) has intervened the spot market and Domestic Non Deliverable Forward (DNDF) to stabilize the Rupiah, said the official on Tuesday (08/13). Yesterday the local currency tumbled again over the trade war, Argentina, and Hong Kong riots issues.
BI’ Executive director Nanang Hendarsah stated the central bank has stabilized the local currency on the spot and Domestic Non-Deliverable Forward markets to anticipated further deterioration. BI, he revealed, is also ready to intervene the government bond’ secondary market.
“We certainly do not want to have an impact on the rupiah,” said Hendarsah.
He rated that financial markets were quite surprised by political events in Argentina. The turmoil in the country lead by Mauricio Macri, he noted, its not only affected the Rupiah but also other currencies in the emerging markets.
The turmoil in the emerging market arose after the sharp depreciation of the Argentine’ Pesos by 14.5 percent to 53 against the US dollar on Tuesday. Peso occurred after the Argentine first-round presidential election gave signed the victory of the opposition leader Alberto Fernandez.
The market reacted negatively because Fernandez was known as a figure who supporting the foreign exchange control regime in Argentina. Concern Macri’ future hit the Argentina’ financial markets, sending the Peso dropped 4.29 percent to US$55.9 and S&P Merval Index plunging 48 percent in dollar terms.
Yesterday, finance minister Sri Mulyani Indrawati said that the government now mitigated the arising risks from several other emerging markets, such as Argentina, Brazil, Mexico, Hong Kong. Most important, she added, to avoid the impact of the global risks to Indonesian economy.
Some analysts give a note that the global uncertainties are estimating will create more uncertainty in the financial market and make the Jakarta Composite Index (JCI) movement slowing down in the next couple of days. The influence is also expected will affect the Rupiah rate.
Yesterday, US stocks halted a two-day slide and treasuries tumbled after the Trump administration de-escalated its trade war with China. The American leader said he delayed the tariffs to spare the Christmas shopping season after his representatives had a “productive” call with China.
In Indonesia, the exchange rate of JISDOR to Rupiah was ended at 14,283 over the Greenback. Today, the local currency still blanket with negative sentiment from the global market and move in the limited zone.
The Jakarta Composite Index closed down 0.63 percent to 6,210.96 level on Tuesday. Today the composite index its expecting move in the range 6,123 to 6,372.
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