Rupiah undervalued amid market irrationality: Bank Indonesia chief

He blames fears over US-China trade war for currency falling more than 10% since start of year

Despite five interest rate hikes totalling 150 basis points, the Indonesian rupiah continues to slide. It has dropped 12 per cent since the beginning of the year, breaking the psychological barrier of 15,000 rupiah to the US dollar.
Despite five interest rate hikes totalling 150 basis points, the Indonesian rupiah continues to slide. It has dropped 12 per cent since the beginning of the year, breaking the psychological barrier of 15,000 rupiah to the US dollar.PHOTO: BLOOMBERG
Despite five interest rate hikes totalling 150 basis points, the Indonesian rupiah continues to slide. It has dropped 12 per cent since the beginning of the year, breaking the psychological barrier of 15,000 rupiah to the US dollar.
BANK INDONESIA GOVERNOR PERRY WARJIYO.

Indonesia's central bank governor said the country's currency is "undervalued" and attributed a more than 10 per cent slide in the rupiah to levels not seen since the Asian financial crisis two decades ago, to "market irrationality".

"The rupiah is undervalued. It's very difficult to explain why the exchange rate is moving so much," Bank Indonesia governor Perry Warjiyo told The Straits Times.

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A version of this article appeared in the print edition of The Straits Times on October 16, 2018, with the headline 'Rupiah undervalued amid market irrationality: Bank Indonesia chief'. Subscribe