JAKARTA: Bank Indonesia "entered" the foreign-exchange market on Thursday, when the rupiah hit its lowest level in two years, and the central bank will be present "especially during rapid depreciation" of the currency, a senior official said.
The rupiah touched 13,800 per dollar, its weakest since February 2016.
"The current level is too weak," Doddy Zulverdi said. "It does not reflect fundamentals."
At 0841 GMT, the rupiah had strengthened to 13,745.
The rupiah weakened marginally against the dollar in 2017, and so far this year has shed about 1.3 percent.
Zulverdi said recent improvements in Indonesia's balance of payments and current account should limit the risk of the rupiah weakening further.
He said dollar demand from Indonesian companies for debt repayment was adding to pressure on the rupiah at present.
The central bank would continue monitor inflation levels for guidance on monetary direction, Zulverdi said, adding that the inflation rate remains within BI's target.
On Thursday, Indonesia reported an annual headline rate for February of 3.18 percent, the lowest since December 2016.
The current level of the BI's 7-day reverse repurchase rate "is still consistent with direction of the inflation and the plan to hike benchmark rate by the US," Zulverdi said.
"There is no more room to cut," he added.
The central bank cut the key rate by a total of 200 basis points during 2016 and 2017 in a bid to lift lending and growth.
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