Jakarta. The Indonesian rupiah has not stabilized and there is a risk the currency could fall further due to trade war tension, a deputy governor of Bank Indonesia (BI) said Friday (14/09).
Deputy Governor Dody Budi Waluyo told reporters BI was still "guarding the rupiah's exchange rate" although the currency has appreciated slightly to 14,820 a dollar at 12:55 p.m. on Friday, from 14,940 last week - its lowest level in 20 years.
External conditions continue to be a risk that could further weaken the rupiah, Dody said, adding that the U.S.-China trade war poses more of a risk than contagion from crises in Argentina and Turkey, which is easier to predict.
"We still see the exchange rate as not yet stable and is far from its fundamentals," he said, adding that BI will combine interest rate policy with currency intervention and allow gradual falls in the rupiah to manage the volatility.
BI has raised interest rates four times since mid-May to defend the rupiah.