Bank Indonesia (BI) intervened in the foreign currency and bond markets through domestic non-deliverable forwards (DNDF) to stabilize the local unit, PT Garuda Berjangka Director Ibrahim Assuaibi said in Jakarta Tuesday.
"The intervention has successfully prevented the Garuda currency from weakening although Bank Indonesia announced yesterday the country's foreign exchange reserves which nosedived by US$2.12 billion to $124.32 billion as of late September compared to a month earlier. The drop is the first in the three past months," he said.
The country's foreign exchange reserves fell in September 2019 due to the repayment of the government's foreign debts and the declining placement of foreign currencies by the banking industry in the central bank which has three times lowered its benchmark interest rate since early this year.
The government paid an interest of Rp172.42 trillion from January to August 2019, up 6.25 percent compared to the same period last year.
On the external side, hope for peaceful trade negotiations between the US and China again became the main topic Tuesday. The latest report shows China is more doubtful of reach a wide-ranging trade agreement.
The trade tension between the two countries escalated several days before the talks began when the US reportedly blacklisted eight Chinese technological companies Monday, October 7, on charges of human rights violations against the Muslim minority in Xinjiang province.
The rupiah opened lower in the morning trade at Rp17,175. Throughout the day, it fluctuated between Rp14.137 and Rp14,175 against the dollar.