Official: Bank Indonesia intervenes to curb capital outflows amid coronavirus spread

Dhwani Mehta FXStreet

Nanang Hendarsah, Head of monetary management at Bank Indonesia (BI), said by a text message on Monday, the Indonesian central bank intervened in spot fx, domestic NDF and bond markets to stem outflows related to fears of the spread of coronavirus (COVID-19) in South Korea.

Key quotes:

There are outflows in the bond (market) and banks are short covering.

Because of the jump in virus cases in Korea during the weekend. It's to do with a flight to quality away from EM assets.

Market impact:

A surge of infections in South Korea and Italy, and the rising death toll in Iran and China so far this Monday, triggered steep falls in Asian share markets and Wall Street stock futures amid a flight to safety theme.

The Rupiah is now printing a new seven-week low at 13,892.5 against the US dollar, with USD/IDR extending its bullish momentum into a third straight day after the BI slashed the key repo rate to 4.75% on Thursday.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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