Jakarta ( WNAM MONITORING): The Indonesian government is open to deploying various instruments to stabilize the rupiah’s exchange rate, Finance Minister Purbaya Yudhi Sadewa affirmed, placing emphasis on greater intervention in the bond market.
“We have gradually entered the bond market, as have foreign parties. In this way, we can expect to witness stabilization in the coming weeks,” he told the press after a meeting with President Prabowo Subianto in Jakarta on Monday.
Speaking at the Presidential Palace complex, Purbaya emphasized that the government will “enter the bond market every day.”
When asked about the preferred scale of intervention, the finance minister said the government is targeting daily injections of around Rp2 trillion (more than US$113 million) into the bond market.
“We still have several funding sources; this is just a matter of cash management. Hence, I think there will be no problem,” he added, noting that the plan is to implement the Bond Stabilization Fund scheme using available pools of funds.
Purbaya went on to say that a boost to money circulation in the bond market is projected to foster positive sentiment which in turn could potentially attract more funds from foreign investors.
Earlier on May 12, the state treasurer stated that the government was intent on stabilizing the bond market by intervening with the yield rate of government securities to suppress the growing burden on the rupiah, keeping it from depreciating further against the US dollar.
He also warned that excessively raising high yields could expose foreign investors to capital losses and potentially triggering capital outflows.
The rupiah closed at Rp17,668 per US dollar on Monday, weakening from the previous level of Rp17,597.
