A teller counts Indonesian rupiah notes for a customer at a money changer in Jakarta, Indonesia, August 26, 2015. Indonesia's central bank has urged exporters and businesses not to hoard foreign currency as part of its effort to maintain financial stability as the rupiah hit a 17-year low versus the dollar. REUTERS
JAKARTA: Indonesia is poised to unveil a policy package intended to prop up the rupiah, which hit another fresh 17-year low, and boost investment at a time South-East Asia's largest economy faces its weakest growth in six years.
Darmin Nasution, the coordinating minister for economics, said the package was coming after he met President Joko Widodo. Details are expected after 0530 GMT.
The package is expected to add to tax incentives announced on Monday aimed at promoting pioneering industries including oil refineries and infrastructure.
Central bankers across emerging markets are being forced into action to stem falls in their currencies, especially after China allowed its yuan to weaken to four-year lows.
Indonesia's policy package "relates to the real sector. This relates to finance and (also) relates to deregulation, new policies (and) tax holidays," Nasution told reporters.
He noted that most of the new policies were aimed at strengthening the rupiah, and were expected to come into effect next week.
"First it will make economic activity smoother. Secondly, it will push for foreign currency to come in," Nasution said.
The package comes two days after Bank Indonesia (BI) cut its gross domestic product (GDP) growth outlook for this year and next year On Thursday, BI governor Agus Martowardojo said on Thursday he expected 2015 economic growth to be 4.89%, the weakest since 2009.
BI on Thursday was spotted directly selling dollars, not though agent banks, to lift the rupiah, traders said.
The unusual move indicated strong determination of the authority to support the second-worst performing Asian currency so far this year by showing its presence in the market, traders said.
The rupiah made its first gains on Thursday after an eight-day slide to 17-year lows, hitting a session high of 14,020 to the dollar shortly after the announcement about a coming package. For the year, the rupiah has shed about 12% against the dollar.
Indonesia's large current account deficit and the global slump in commodities prices have also pressured the rupiah.
The benchmark Indonesia stock index rose more than 3% on Thursday, heading for its biggest single-day climb in two years. - Reuters
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
