Bloomberg News

Rupiah Declines After Overseas Investors Add to Net Stock Sales

June 05, 2012

Indonesia’s rupiah declined after overseas investors cut holdings of the country’s stocks.

Funds based abroad sold $25 million more of the nation’s equities than they bought yesterday, taking net sales this month to $98 million. Finance ministers and central bank governors from the Group of Seven countries will hold a call today to discuss the European debt crisis, Canadian Finance Minister Jim Flaherty said yesterday as a report showed U.S. factory orders unexpectedly contracted in April for a second month.

“It’s risk aversion and so there has been equity market outflows,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “The big picture hasn’t changed, in that markets are still pretty edgy and there’s no real solution to the European crisis.”

The rupiah weakened 0.4 percent to 9,438 per dollar as of 3:45 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency gained 1.4 percent yesterday. One-month implied volatility, which measures exchange-rate swings used to price options, was little changed at 15.75 percent.

The government’s benchmark 10-year bonds declined, with the yield rising one basis point, or 0.01 percentage point, to 6.54 percent, data compiled by Bloomberg show.

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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