Indonesia’s rupiah slid to the lowest level in more than four years on speculation companies are boosting dollar purchases to make year-end payments, even as the central bank said the currency is “undervalued.”
Indonesia’s rupiah is “undervalued” after weakening to a four-year low and the central bank will keep its policy stance tight to restore investor confidence, Senior Deputy Governor Mirza Adityaswara said.
Indonesia’s rupiah forwards fell to a four-year low on speculation companies are boosting purchases of the greenback to make year-end payments amid a lack of dollars in the domestic market. Government bonds declined.
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 rupiah and stocks fell for a fourth day after yesterday’s surprise interest-rate rise fueled speculation current-account data today will show little improvement from the second quarter’s record deficit.