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Bank Indonesia governor hints at further monetary tightening

Indonesia's central bank Governor Perry Warjiyo hinted that further rate hikes may be in the offing following two benchmark rate increases in as many weeks, Bloomberg News reported.

"Yes, there is a possibility of a rate hike," Warjiyo said in an interview with the new outlet. "Of course, the magnitude and timing will be measured and will depend on our calibration of new information that will be coming."

The Bank Indonesia governor also emphasized the importance of acting early, which he said has strengthened the Indonesian rupiah. The currency has gained more than 2% since May 24, when Warjiyo took office.

"You have to pre-empt the uncertainty," he said. "And thank goodness, after pre-empting those bouts of uncertainties, our rupiah has been quite strong or stable. I want it to be stronger than now. It's still overshooting."

Warjiyo also told Bloomberg that buying government bonds in the secondary market is important for currency intervention to be effective, noting that exchange rates are associated with foreign purchases of government debt.