Indonesia's Central Bank Intervenes to Support Rupiah Amid Middle East Tensions

Indonesia's central bank has intervened in the market to support the rupiah following pressures on emerging markets due to the conflict in Iran. According to Jin10, Destry Damayanti, Senior Deputy Governor of Bank Indonesia, stated on Wednesday that the central bank will continue to be present in the market to maintain exchange rate stability and mitigate the impact of escalating Middle East tensions. She emphasized that the bank will persist with firm and ongoing interventions in the offshore non-deliverable forward market, as well as in the onshore non-deliverable forward, spot, and bond markets. The conflict in Iran is diminishing investor appetite for risk assets, prompting central banks in India and Turkey to also intervene on Monday to defend their currencies. With approximately half of Indonesia's oil demand reliant on imports, rising oil prices are heightening concerns over inflation and widening trade deficits.