1.

Government policy to stabilize Rupiah

In order to achieve the stabilization of the rupiah currency, Bank Indonesia

has a duty to keep the rupiah fluctuation is maintained, while the task of the
Government is strengthened the underpinning factors of competitiveness, namely
improving the productivity of the economy and fight inflation. Government steps to
stabilize rupiah
1. Financial

balance

sheet

repair

by

initializing

BUMN

do

reinsurance.

Establishment of reinsurance transactions and encourage the use of rupiah

will reduce demand for dollars.
2. The Government gave tax allowance.
3. Lowering import of oil and gas.
4. Tax incentives for foreign companies investing in Indonesia who did not
submit an annual dividend of 100 percent to the parent company in the
country of origin.
Three short term strategies that Bank Indonesia apply to create rupiah
stability amid the protracted global crisis are strengthen the management of
liquidity in the money market, strengthened the management of supply and
demand and to strengthen the adequacy of foreign exchange reserves.
These three strategy is done through:
1. Intervene in the Forex market to curb the volatility of the exchange rate of
Rupiah.
2. Make a purchase of the State Securities (SBN) in the secondary market, with
still pay attention to its impact on the availability of SBN for inflow and
liquidity of money market.
3. Strengthen the management of liquidity in Rupiah, through open market
operations, in order to divert the daily liquidity to longer tenor.
4. Adjust the frequency auction Foreign Exchange (FX) Swaps from twice a week
to 1 times a week.

5. Changing the Term Deposit auction mechanism (TD) foreign currency from
variable rate tenders into fixed rate tender, adjust pricing, and extend the
tenor of up to 3 months.
6. Lower limit of the purchase of foreign currency with the underlying document
of proof of current US $ 100 thousand to $ 25 thousand per customer per
month.

7. Do the coordination with other central banks and Governments to strengthen

its foreign exchange reserves.