May 10, 2018 / 1:55 AM / in 5 months

Indonesia rupiah rallies in NDFs after cbank says open to rate hike

May 10 (Reuters) - Indonesia’s rupiah rose in forwards markets on Thursday after the central bank said it was intervening in the market to support the currency and was preparing to adjust its benchmark interest rate.

The three-month non-deliverable forward (NDF) dropped to 14,385 from Wednesday’s close of 14,411 in offshore trade.

Financial markets in Indonesia were closed for a local holiday. The rupiah closed at 14,075 against the dollar on Wednesday.

Late on Wednesday Bank Indonesia (BI) suggested it may hike its key rate to shore up the currency, now at its weakest in 2-1/2 years. It has kept the rate steady since cutting it by 25 basis points last September.

BI said it was also “optimising other monetary operation instruments” to ensure enough rupiah and dollar onshore liquidity. (Reporting by Susan Mathew in Bengaluru; Editing by Kim Coghill)

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