Rupiah Weakens for Fourth Day After Foreign Funds Sell Stocks

Indonesia’s rupiah declined for a fourth day after overseas investors pulled money from local stocks on concern the nation hasn’t managed to rein in its current-account deficit. Government bonds were steady.

Foreign funds sold $21 million more shares than they bought yesterday, taking net sales to $336 million in November, exchange data show. The current-account shortfall will be 2.2 percent of gross domestic product in the fourth quarter, Perry Warjiyo, executive director for economic research and monetary policy at the central bank, said Nov. 13. The deficit was 2.1 percent of GDP in the preceding three months, official data show.

“There’s a lot of skepticism that Indonesia has overcome its current-account deficit problems,” said Thomas Harr, head of Asia local markets strategy at Standard Chartered Plc in Singapore.

The rupiah fell 0.1 percent to 9,635 per dollar as of 3:03 p.m. in Jakarta, prices from local banks compiled by Bloomberg show. The currency has weakened almost 6 percent this year, the worst performance among the 11 most-traded Asian currencies tracked by Bloomberg. One-month implied volatility, which measures exchange-rate swings used to price options, fell five basis points to 4.65 percent.

Pressure on the rupiah to weaken is likely to remain due to dollar purchases by corporates, especially toward the end of the year, Bank Indonesia said in a quarterly report posted on its website yesterday.

The yield on the government’s 7 percent notes due May 2022 was 5.41 percent, according to prices from the Inter Dealer Market Association.

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: Amit Prakash at aprakash1@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.