Indonesia’s central bank is stepping into the market to support the rupiah that is in its longest losing streak since last year.
Bank Indonesia (BI) is intervening in the spot, domestic non-deliverable forwards and bond markets to maintain currency supply and demand balance, central bank monetary management executive director Edi Susianto said.
“Market confidence needs to be maintained,” Susianto said, adding that the weakness is largely driven by external sentiments.
Photo: Bagus Indahono, EPA-EFE
Susianto’s comments come with the currency set to decline for a sixth straight day. The rupiah along with other emerging market (EM) currencies are coming under depreciation pressure, as signs of resilience in the US economy bolster the US dollar.
“Global market developments have been rather unfavorable for EM currencies, including the rupiah, due to escalating tensions in the Middle East and recent better-than-expected US jobs data,” Susianto said.
The currency weakened as much as 1.3 percent to 15,693 rupiah per US dollar yesterday. It had rallied more than 8 percent in the third quarter on expectations that the US Federal Reserve would persist with heavy rate cuts after its recent half percentage point reduction.
BI was seen supporting the currency in early trading, traders said. That was the first time in months that the central bank had intervened in the market.
The Indonesian central bank has ample resources to support the rupiah, with its foreign exchange reserves remaining near a record. The stockpile stood at US$149.9 billion last month, covering 6.4 months of imports and external debt servicing requirements.
The weakness in the rupiah has lifted expectations that BI might keep its policy rate on hold at its meeting on Wednesday next week after a surprise rate cut last month.
Meanwhile, the New Taiwan dollar ended down NT$0.168, or 0.52 percent, at NT$32.131 against the US dollar in Taipei on Monday, its lowest level since Sept. 10, when it closed at NT$32.173.
Dealers said the US dollar attracted strong buying soon after the local forex market opened, as investors were encouraged by the US nonfarm payroll report, which showed some 254,000 jobs were created last month, beating an earlier market estimate of 150,000.
The robust jobs report might prompt the Fed not to make big rate cuts later this year, following its aggressive 50 basis point reduction last month, dealers said. As a result, the US Dollar index, which traces the value of the currencies of Washington's six major trading partners, rose yesterday, they noted.
According to Taiwan's central bank, the US Dollar index rose 0.61 percent yesterday, sending down regional currencies, with the Japanese yen falling 1.33 percent, the South Korea won 0.64 percent and the Singapore dollar 0.54 percent.
The weakness of those Asian currencies put pressure on the NT dollar throughout yesterday's session, dealers said.
Additional reporting by CNA
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
A start-up in Mexico is trying to help get a handle on one coastal city’s plastic waste problem by converting it into gasoline, diesel and other fuels. With less than 10 percent of the world’s plastics being recycled, Petgas’ idea is that rather than letting discarded plastic become waste, it can become productive again as fuel. Petgas developed a machine in the port city of Boca del Rio that uses pyrolysis, a thermodynamic process that heats plastics in the absence of oxygen, breaking it down to produce gasoline, diesel, kerosene, paraffin and coke. Petgas chief technology officer Carlos Parraguirre Diaz said that in
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
SUBSIDIES: The nominee for commerce secretary indicated the Trump administration wants to put its stamp on the plan, but not unravel it entirely US President Donald Trump’s pick to lead the agency in charge of a US$52 billion semiconductor subsidy program declined to give it unqualified support, raising questions about the disbursement of funds to companies like Intel Corp and Taiwan Semiconductor Manufacturing Co (台積電). “I can’t say that I can honor something I haven’t read,” Howard Lutnick, Trump’s nominee for commerce secretary, said of the binding CHIPS and Science Act awards in a confirmation hearing on Wednesday. “To the extent monies have been disbursed, I would commit to rigorously enforcing documents that have been signed by those companies to make sure we get
RSS