Indonesia’s rupiah fell by the most in four weeks after the nation recorded its fourth straight quarterly current-account deficit. Government bonds were steady after the central bank kept borrowing costs unchanged.
The current-account deficit narrowed to 2.4 percent of gross domestic product in the third quarter, from 3.5 percent in the previous period, the central bank said today. The trade surplus rose to $553 million in September, from a revised $233 million the previous month, even as exports contracted for a sixth month. Bank Indonesia maintained its benchmark reference rate at a record-low 5.75 percent for a ninth month, as predicted by all 16 analysts in a Bloomberg News survey.
“The risk for the rupiah is really tilted toward further weakening,” said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore. “The big problem for the currency is the current-account position. Improvement in the trade balance won’t help much if export growth is still lagging.”
The rupiah declined 0.3 percent to 9,638 per dollar as of 3:32 p.m. in Jakarta, the most since Oct. 10, prices from local banks compiled by Bloomberg show. The currency reached 9,668 yesterday, the weakest level since October 2009. One-month implied volatility, which measures exchange-rate swings used to price options, was steady at 5 percent.
Overseas investors sold $246 million more local shares than they bought in November, exchange data show, while adding 4.98 trillion rupiah ($517 million) to their holdings of government debt, according to finance ministry data. Foreign funds held a record 255.31 trillion rupiah of Indonesian bonds as of Nov. 6.
The yield on the government’s 7 percent notes due May 2022 was little changed at 5.62 percent, the lowest level since March 5, prices from the Inter Dealer Market Association show.
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