Indonesia’s central bank said Wednesday it would intervene “in the next two weeks” to boost the ailing rupiah, which hit a 30-month low this week.
Besides selling dollars, Bank Indonesia will offer term deposits to allow domestic banks to park their dollars with the central bank, rather than overseas, bank spokesman Difi Johansyah told AFP.
“We will offer an attractive interest rate so that domestic banks will no longer send their US dollars offshore,” Johansyah said, adding that the new monetary instrument would serve as “weapon” to stabilise the rupiah.
The rupiah traded late Tuesday at 9,560 to the dollar, hitting a 30-month low, according to Currency Management Group analyst Farial Anwar.
Fears of Greece’s possible exit from the eurozone have sent investors to safe-haven assets, creating an onshore liquidity shortage and putting pressure on the local currency, Anwar said.
“There is panic buying in the market due to capital outflow by foreign investors, triggered by the eurozone crisis,” he said, adding that early this year the rupiah traded at 8,900 to the dollar.