JAKARTA, Nov 7 (Reuters) - Indonesia’s central bank allowed the rupiah to strengthen because the currency’s depreciation in 2018 had been too deep, a senior official said, after the rupiah gained 1.5 percent during Wednesday trading.
“The rupiah must be given room for appreciation because during 2018, it has weakened too sharply,” Nanang Hendarsah, Bank Indonesia’s (BI) head of monetary management said, adding that the central bank will monitor the pace of the appreciation.
The rupiah has strengthened by 4.3 percent so far this month, with most of the gains recorded in the past two days. Hendarsah said this was due to the U.S. midterm election results.
BI has raised interest rates five times since May to defend the fragile rupiah. (Reporting by Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Gopakumar Warrier)