Indonesia Backs Economy Despite Weakening Rupiah

Indonesian authorities insisted Thursday the economy was healthy despite pressures from the Iran war and the currency depreciating to a record low against the dollar. The rupiah has fallen to below 17,400 to the greenback, prompting authorities to take measures to defend the currency, including tightening rules for dollar purchases.

The rupiah’s exchange rate “has been kept at a level comparable to other countries,” central bank governor Perry Warjiyo told reporters in Jakarta. “Currencies across the world are weakening. 

We are making sure that the degree of depreciation does not become too large by taking all-out measures.” Perry said that the rupiah’s weakening was driven in part by seasonal factors, including strong dollar demand for corporate dividend payments and for hajj pilgrims travelling abroad.

He said Bank Indonesia will continue defending the currency, including further tightening rules for dollar purchases. Since April, buyers of more than $50,000 in a given month must provide supporting documents to justify their need for greenbacks. The level was previously $100,000.