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Rupiah Falls Most in Two Weeks on Bets Importers Will Buy Dollar

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Oct. 30 (Bloomberg) -- Indonesia’s rupiah fell the most in two weeks on speculation importers will step up dollar purchases to meet month-end payments.

A decline in the currency is probably being curbed by fund inflows into the nation’s bond market, said Veni Kriswandi, head of trading at PT Bank Commonwealth. Indonesia plans to raise 500 billion rupiah ($52 million) by offering Islamic securities today, after a debt auction last week drew bids for three times the amount offered.

“The rupiah is going to be in a tight range,” said Jakarta-based Kriswandi. “We have some offers coming because of the sukuk auction going on today and we have the usual month-end buyers of dollars.”

The rupiah dropped 0.2 percent to 9,630 per dollar as of 3:17 p.m. in Jakarta, compared with 9,609 yesterday, according to prices from local banks compiled by Bloomberg.

The currency reached 9,656 yesterday, the weakest level since Oct. 11. It has lost 5.8 percent this year, the worst performance among Asia’s 11 most-active currencies. The rupiah will probably trade between 9,615 and 9,630 today, she predicted.

One-month implied volatility, which measures exchange-rate swings used to price options, declined two basis points, or 0.02 percentage point, to 6.23 percent.

The yield on the government’s 7 percent bonds due May 2022 held at 5.72 percent today, according to prices from the Inter Dealer Market Association.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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