April 26, 2018 / 11:17 AM / 3 months ago

Indonesia c.bank: can adjust interest rate if rupiah threatens stability

JAKARTA, April 26 (Reuters) - Indonesia’s central bank governor said on Thursday he does not rule out adjusting its benchmark interest rate if weakness in the rupiah currency were to threaten stability of the financial system.

Governor Agus Martowardojo said Indonesia’s economic fundamentals were strong, citing low inflation, a current account deficit within Bank Indonesia’s healthy threshold and good economic growth.

“If pressure continues and has the potential to hamper the inflation target and disturb the stability of the financial system, BI will not rule out adjusting the benchmark rate”, the governor told a news conference.

The rupiah has lost nearly 5 percent of its value against the U.S. dollar since late January and traded near its weakest in more than two years on Thursday.

Traders said the central bank had intervened and the currency closed at 13,885 per dollar on Thursday. The yield curve of Indonesian government bonds rose, while the main stock index ended 2.8 percent lower. (Reporting by Maikel Jefriando, Nilufar Rizki, Fransika Nangoy and Gayatri Suroyo Editing by Ed Davies and Jacqueline Wong)

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