UPDATE 1-Indonesia c.bank says no plans for new instruments to deal with rupiah

Fri Jan 25, 2013 3:53am EST

Related Topics

* Bank Indonesia says will intervene in market where necessary

* To maintain rupiah stability with various existing instruments (Adds comments)

JAKARTA Jan 25 (Reuters) - Bank Indonesia, the central bank, said on Friday it had no plans to introduce new instruments to deal with the decline of the rupiah currency and would continue to intervene in the market where necessary.

Indonesia's rupiah has been one of the world's worst performing currencies over the past year, dragged down in part by concerns over a widening current account deficit. It was trading in late afternoon at around 9,665/85, down on the day, but above lows touched earlier this month.

"We try to maintain the stability of the rupiah with various existing instruments. There is no fundamental change of instruments or anything," the deputy governor for monetary policy, Hartadi Sarwono, told reporters.

"But we know the problem is a shortage of dollar supplies ... from day to day. I need to reiterate this because our balance of payments is still in surplus overall, which means that the current account deficit could still be covered by the capital account."

But the nature of the capital account, in which a major part was from goods and services, meant there was not always enough to cover the shortfall in the trade balance.

"Therefore, BI (Bank Indonesia) must from time to time ... venture into the market to reduce the gap between supply and demand," he said.

He said he expected the current account deficit to improve and that demand for foreign exchange could be met by the market.

"As usual, we will intervene. We'll see how the numbers are now. If there is a huge need for oil and gas imports, we will increase more there. So there is no instrument that has changed, only the amount and timing." (Reporting by Adriana Nina Kusuma; Writing by Jonathan Thatcher; Editing by Jacqueline Wong)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.