Asian currencies posted their first monthly loss since August, led by Indonesia’s rupiah and the Thai baht, as concern about current-account deficits and political unrest in the region fueled fund outflows.
The rupiah led losses in emerging markets this month amid concern Indonesia’s current-account gap will leave the nation vulnerable to fund outflows when the U.S. cuts stimulus. Government bonds fell the most since 2011.
Indonesia’s rupiah weakened beyond 12,000 per dollar for the first time since 2009 after a failed debt sale added to concern fund inflows are slowing on the prospect of a cut in stimulus by the Federal Reserve.
Indonesia’s rupiah forwards fell by the most in two months on concern the country’s current-account and trade gaps aren’t narrowing fast enough to restore investor confidence. Government bonds gained for a third day.
Indonesia’s bonds fell for a third week, the longest losing streak since July, and the rupiah dropped as concern the Federal Reserve will begin to reduce its record stimulus offset a narrower current-account deficit.
Indonesian lawmakers yesterday approved Finance Minister Agus Martowardojo to become the next central bank governor after he said his priorities would be a stable exchange rate and keeping inflation low.
President Susilo Bambang Yudhoyono made progress on his bid to appoint Indonesia Finance Minister Agus Martowardojo the next central bank chief as a parliamentary panel agreed to put the candidate through a fit-and-proper test.