JAKARTA - Indonesia's financial services regulator has allowed listed companies to buy back their stocks without shareholders approval, while the central bank conducted bold currency intervention to calm markets, officials said on Wednesday.

The moves came after the main stock index fell as much as 7.1% on Tuesday pressured by concerns over the government's fiscal strategy and growth prospects. The index recovered slightly on Wednesday.

The rupiah extended losses on Wednesday, falling by as much as 0.7%.

The currency was hit by spillover impact from Tuesday's drop in the stock market as well as global factors, Bank Indonesia's director of monetary and securities asset management Fitra Jusdiman told Reuters.

"BI has and will continue to take anticipatory, mitigatory response to ensure stability in the rupiah exchange rate, maintain FX supply-demand, including by intervening in a bold and measured way," he said.

The financial regulator's new buyback rules are effective for six months and are intended to shore up market confidence, said Inarno Djajadi, chief regulator for the capital market at the Indonesia Financial Services Authority.

"We hope to give a positive signal that companies have good fundamentals, to provide market confidence to investors as well as give flexibility to listed companies to conduct corporate actions to reduce share volatility," Inarno told a press conference.

The announcement comes hours before the central bank is due to hold a press conference on its monetary policy review. Most economists polled by Reuters expect BI to keep rates unchangedto prioritise rupiah stability. (Reporting by Gayatri Suroyo, Stefanno Sulaiman, Fransiska Nangoy; Editing by John Mair, Martin Petty)


Reuters