Update COVID-19 in Indonesia: 24,538 confirmed infections, 1,496 deaths (28 May 2020)
29 May 2020 (closed)
USD/IDR (14,502) -231.01 -1.57%
EUR/IDR (16,128) -204.62 -1.25%
Jakarta Composite Index (4,753.61) +37.43 +0.79%
In an effort to support the ailing Indonesian rupiah, state-owned energy company Pertamina will cut its foreign exchange purchases on the spot market by around 50 percent. Pertamina together with state utility firm Perusahaan Listrik Negara (PLN) account for about half of Indonesia's daily foreign exchange (forex) transactions as these companies require US dollars for fuel purchases and overseas debt settlements.
After Malaysia's ringgit, the rupiah has been the second-worst performing Asian currency in 2015, depreciating 18.4 percent against the US dollar so far this year due to looming higher US interest rates and China's economic slowdown (causing severe downward pressure on global commodity prices). As the heavily weakening rupiah causes financial instability (for example because local companies' foreign debt positions deteriorate sharply), Bank Indonesia and the Indonesian government are making efforts to support the ailing currency. Last week, Indonesian President Joko Widodo urged Pertamina, one of Indonesia's largest companies in terms of revenue and income, to cut its forex demand. Currently, Pertamina requires about USD $70 million per day.
Instead Pertamina will use local banks' foreign exchange short-term loan and hedging facilities for its payment needs.
Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.22 percent to IDR 14,728 per US dollar on Tuesday (29/09), a fresh 17-year low.
Indonesian Rupiah versus US Dollar (JISDOR):| Source: Bank Indonesia