"So far, the rupiah's appreciation has a positive impact on the economy," Perry Warjiyo told a hearing of parliament's financial commission.

"If, later on, it strengthens too far and it affects the economy negatively, we will not hesitate to guide it towards its fundamentals, using market mechanism."

The rupiah has rallied in recent weeks and closed last week at its strongest in almost two years, at 13,565 to the dollar. On Monday, it weakened slightly, to stand at 13,605 by 0612 GMT.

(Reporting by Tabita Diela; Writing by Gayatri Suroyo; Editing by Clarence Fernandez)