JAKARTA- Indonesia’s central bank is participating in the foreign exchange market to prevent extreme volatility, a senior official said on Monday, amid a weakening of its rupiah currency.
The rupiah weakened 0.59 percent to 16,285 against the dollar on Monday. In recent days, the currency has been hovering at a four-year low level amid a strong dollar.
“We will be in the market to ensure there will be no extreme volatility,” Bank Indonesia’s head of monetary department Edi Susianto said.
Edi earlier said the rupiah’s depreciation was in line with moves by other emerging Asian currencies, following US employment data that was above market expectations.
Indonesia’s economic growth in the first quarter beat expectations, buoyed by high public spending for the country’s elections, but maintaining the strong pace will be challenging due to global developments and tight local monetary conditions.
Southeast Asia’s largest economy grew by 5.11 percent on a yearly basis in the January-March period, the highest growth rate in three quarters. Growth exceeded the 5 percent rate expected by economists polled by Reuters and the 5.04 percent achieved in the fourth quarter.
In the first three months of 2024, campaign expenditure for the Feb. 14 election and higher household spending during the Muslim holy month of Ramadan, which started in March, bolstered economic activity.
That helped offset the hit that Indonesia’s economy has taken from declining commodity exports in the past year. The resource-rich country is the world’s biggest exporter of thermal coal, palm oil and nickel, among other commodities.
