Rupiah Halts Five-Day Drop as U.S. Data Offsets Oil
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Indonesia’s rupiah halted five days of losses as signs of an improving U.S. economy outweighed concern on government plans to reduce fuel subsidies. Bonds were little changed.
Pending sales of existing homes rose 2 percent last month, double the median forecast of 1 percent, according to the National Association of Realtors in Washington yesterday. Bank Indonesia had forecast on Feb. 20 the economy will grow 6.3 percent to 6.7 percent this year. Inflation may exceed the central bank’s target of a maximum of 5.5 percent in 2012 if fuel prices are raised by 1,000 ($0.11) per liter or more, Governor Darmin Nasution said on Feb. 23.
“The rupiah is more driven by the global economy as a whole at the moment,” said Gusti Kahari, a foreign exchange dealer at PT Bank Artha Graha Internasional in Jakarta. “Higher fuel prices will surely have an impact but it won’t be so severe because Indonesia has very strong fundamentals.”
The rupiah traded at 9,160 per dollar as of 9:44 a.m. in Jakarta, compared with 9,162 yesterday, according to prices from local banks compiled by Bloomberg. The currency touched 9,124 yesterday, the weakest level since Jan. 16.
Indonesia will decide whether to reduce fuel subsidies after the government’s discussion with parliament to revise the 2012 state budget in March, Hatta Rajasa, coordinating minister for the economy, said on Feb. 23. The government is proposing a 500 rupiah increase to 1,500 rupiah, said Jero Wacik, energy and mineral minister.
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