Indonesia’s rupiah declined to a six-week low and government bonds fell on concern the nation’s current-account deficit will widen.
Indonesia’s 10-year bonds headed for the first weekly loss in almost a month after demand dropped at a sovereign debt auction.
Indonesia will have a chance to ease monetary policy next year as inflation slows, after maintaining a tight stance in 2014, Bank Indonesia Deputy Governor Halim Alamsyah said.
Indonesia’s central bank kept its key interest rate unchanged for a fifth straight meeting, extending a pause in monetary tightening as inflation slowed.
Central bankers in London and Jakarta will probably conclude this week that inflation poses little threat as they choose to keep borrowing costs unchanged.
Indonesia’s rupiah climbed to a two- week high and stocks rallied before data that’s forecast to show the trade balance returned to surplus and inflation slowed.
Indonesia needs greater consolidation in its banking industry and will push small lenders to merge or seek strategic investors, the Financial Services Authority’s top official said.
PT Bank Mandiri, Indonesia’s largest lender by assets, has opened a new office in Singapore to integrate its brokerage and investment-management units, seeking a foothold as rivals from the city state expand in its home country.
Indonesian bonds were set for a second weekly advance and the rupiah strengthened after inflation eased last month to the slowest pace since June.
Indonesia’s rupiah headed for its strongest quarter since June 2009 as a shrinking current-account deficit and slowing inflation lured inflows to Southeast Asia’s biggest economy.