Indonesia monetary policy to stay tight because of rupiah risks: central bank

Indonesia's central bank will keep monetary policy tight because it does not want the rupiah currency to weaken too much, its governor told reporters on Monday. 

PHOTO: BLOOMBERG

JUL 13, 20159:35 PM

[JAKARTA] Indonesia's central bank will keep monetary policy tight because it does not want the rupiah currency to weaken too much, its governor told reporters on Monday.

"We have to remain cautious because we don't want to loosen monetary policy and make the exchange rate weaker, because it would become a boomerang pushing inflation higher," Agus Martowardojo told reporters.

The rupiah has been under pressure at around 13,300 per dollar, the second-worst performer in emerging Asia this year, after Malaysia's ringgit.

Bank Indonesia will continue a long-standing policy of supporting the rupiah in the foreign exchange market, Mr Martowardojo added.

REUTERS