Indonesia’s rupiah forwards fell the most in more than three weeks on speculation the current-account deficit will widen as imports climb and exports slump. Government bonds declined.
The 2012 current account will turn to a $16 billion deficit, Standard Chartered Plc predicted in a report yesterday. The shortfall widened to $6.9 billion in the second quarter from $3.2 billion in the previous three months, official data show. The trade deficit was $1.3 billion in June as exports fell 16.4 percent and imports rose 10.7 percent.
“The current account is still a concern because the demand for dollars is still high for import payments,” said Rully Nova, a currency analyst at PT Bank Himpunan Saudara 1906 in Jakarta.
Twelve-month non-deliverable forwards dropped 0.7 percent to 10,053 as of 3:29 p.m. in Jakarta, a 5.4 percent discount to the spot rate, data compiled by Bloomberg showed. That was the weakest level since July 25. Forwards are agreements to buy or sell assets at a set price and date. Non-deliverable contracts are settled in dollars.
The rupiah fell 0.3 percent to 9,514 per dollar, according to prices from local banks compiled by Bloomberg. It has lost 4.7 percent this year, the second-worst performance among Asia’s 11 most-active currencies. One-month implied volatility, which measures exchange-rate swings used to price options, slid 115 basis points, or 1.15 percentage point, to 6.0 percent.
“It’s difficult for the rupiah to strengthen,” Nova said. “Domestic investors don’t want to invest at all in the rupiah before the long holiday for Eid al-Fitr.”
Indonesian financial markets will be shut from Aug. 17 through Aug. 22 for the Muslim holiday.
The yield on the government’s 6.25 percent bonds due April 2017 increased two basis points to 5.52 percent, according to prices from the Inter Dealer Market Association.