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Rupiah falls most since April

Publication Date : 05-06-2014


Indonesia’s rupiah declined the most since April on Thursday on concern that a deteriorating trade balance will spur capital outflows from the nation’s financial markets.

Official data this week showed imports exceeded exports by $1.96 billion in April, the widest gap in nine months, stoking speculation the current-account shortfall will increase from last quarter’s 2.06 per cent of gross domestic product.

The gap reached a record 4.4 per cent in the three months through June 2013, fueling $1.8 billion of stock outflows in the second half of last year. Ten-year U.S. treasury yields climbed 11 basis points this week, set for the biggest jump since March, Bloomberg reported.

“With US yields starting to rise, concerns over countries with twin deficits may return,” said Khoon Goh, a senior foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “Indonesia had a surprisingly large trade deficit, so that’s causing some investors to exit their positions.”

The currency slid 0.9 per cent to close at 11,890 per dollar, the largest drop since April 23, prices from local banks show. It has lost 1.8 per cent this week and reached 11,893 earlier, the lowest level since Feb 19. In the offshore market, one-month non-deliverable forwards declined 0.8 per cent to 11,947, trading 0.5 per cent weaker than the onshore spot rate.


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