Nov. 29 (Bloomberg) -- Indonesia’s rupiah dropped for a third straight day after Fitch Ratings downgraded its credit- rating outlook on the U.S., the second-biggest export market for Southeast Asia’s largest economy.
Fitch lowered the outlook on its AAA long-term credit rating to negative from stable yesterday, citing “declining confidence” in U.S. public finances. The rupiah has dropped 3.7 percent this month, less than a slide of 4.2 percent for Singapore’s dollar and 6.2 percent for India’s rupee, on speculation Bank Indonesia has been limiting the currency’s losses. The central bank will remain in the market to reduce volatility, Deputy Governor Hartadi Sarwono said on Nov. 23.
“The U.S. outlook downgrade and the continuing debt crisis in Europe are affecting overall sentiment,” said Gundy Cahyadi, a Singapore-based economist at Oversea-Chinese Banking Corp. “We haven’t seen Bank Indonesia in the market today.”
The rupiah declined 0.5 percent to 9,195 per dollar as of 9:20 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. It touched 9,230 on Nov. 24, the weakest level since June 2010.
The government’s benchmark bonds fell for a 10th straight day yesterday. The yield on the 8.25 percent notes due July 2021 increased seven basis points, or 0.07 percentage point, to 6.88 percent, according to the Inter-Dealer Market Association.
--Editors: Ven Ram, Anil Varma
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