Bank Indonesia Governor Destri Damayanti told lawmakers at a congressional hearing on Monday that the bank has drastically reduced costly immediate market intervention operations. Currently, spot transactions only account for about 30% of the total foreign exchange intervention. Destri said that earlier immediate intervention was the main method for the Bank of Indonesia to stabilize the exchange rate and would directly consume foreign exchange reserves. The Bank of Indonesia is shifting more towards using domestic no-principal delivery forward and offshore no-principal delivery forward tools. Destri said the effectiveness of such instruments has been verified. However, due to fundamental and structural factors, the Indonesian rupiah is still under pressure. The Bank of Indonesia is continuing discussions on related issues with the Financial System Stability Committee, which includes the Ministry of Finance and the Financial Services Authority. Destri said, “Even with large-scale intervention, if the fundamentals of the external sector remain weak, the situation is bound to be full of challenges.”

Bank Indonesia Governor Destri Damayanti told lawmakers at a congressional hearing on Monday that the bank has drastically reduced costly immediate market intervention operations. Currently, spot transactions only account for about 30% of the total foreign exchange intervention. Destri said that earlier immediate intervention was the main method for the Bank of Indonesia to stabilize the exchange rate and would directly consume foreign exchange reserves. The Bank of Indonesia is shifting more towards using domestic no-principal delivery forward and offshore no-principal delivery forward tools. Destri said the effectiveness of such instruments has been verified. However, due to fundamental and structural factors, the Indonesian rupiah is still under pressure. The Bank of Indonesia is continuing discussions on related issues with the Financial System Stability Committee, which includes the Ministry of Finance and the Financial Services Authority. Destri said, “Even with large-scale intervention, if the fundamentals of the external sector remain weak, the situation is bound to be full of challenges.”