Indonesian rupiah hits 17-year low, authorities downplay impact

Indonesian rupiah hits 17-year low, authorities downplay impact
PHOTO: Reuters

JAKARTA - Indonesian authorities on Thursday downplayed the weakening rupiah, which hit a fresh 17-year low against the dollar, saying it would not have a significant impact on Southeast Asia's largest economy.

The rupiah, the second worst performing Asian currency this year after the Malaysian ringgit, fell as much as 0.2 percent on Thursday to 13,395 per US dollar, its weakest since August 1998. "The ups and downs of the rupiah are normal. It will not have a big impact," chief economics minister Sofyan Djalil told reporters.

"The government with (the central bank) will try to safeguard the rupiah in accordance to its fundamentals." Central bank spokesman Peter Jacobs said there were no"significant changes" in the domestic foreign exchange market and the cause of the weakening rupiah was due to "external sentiments." The dollar strengthened against a basket of currencies on Wednesday after data showed U.S. home resales hit an 8-1/2-year high in June.

Caution is growing over possible intervention by Bank Indonesia to prop up the rupiah, which is down more than 7 percent against the dollar so far this year.

Central bank deputy governor Mirza Adityaswara said on Wednesday the central bank was always in the foreign exchange market, especially when the rupiah is undervalued.

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