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Rupiah Drops to Two-Week Low on Concern Chinese Growth Slowing

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Nov. 1 (Bloomberg) -- The rupiah dropped to a two-week low on concern a cooling Chinese economy will damp regional growth even as data released today showed Indonesia’s export-growth accelerated and inflation eased. Government bonds fell.

Indonesia’s overseas shipments rose by more than economists predicted in September and inflation eased to the slowest pace in 17 months in October, according to official reports. A manufacturing index for China, the third-biggest buyer of Indonesia’s exports, fell last month to the lowest level since February 2009, data showed today. Japan intervened yesterday to weaken the yen, spurring speculation other countries in the region will follow suit to protect overseas shipments.

China’s data “in the short term will probably cause a knee-jerk reaction,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “We are also seeing a continuation of negative sentiment after the Bank of Japan intervention.”

The rupiah slid 0.5 percent to 8,895 per dollar as of 3:45 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency reached 8,909 earlier, the weakest level since Oct. 13.

Exports rose 46.3 percent in September from a year earlier, compared with a gain of 37.1 percent the previous month, the Central Bureau of Statistics reported. That’s more than the 40.7 percent increase predicted by economists surveyed by Bloomberg. Consumer prices rose 4.42 percent from a year earlier in October, compared with a 4.61 percent gain in September and the 4.76 percent median estimate in a Bloomberg poll.

The China Federation of Logistics and Purchasing said the Purchasing Managers’ Index slipped to 50.4 from 51.2 in September.

The yield on the 8.25 percent government bond due July 2021 climbed two basis points, or 0.02 percentage point, to 6.36 percent today.

To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

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