Rupiah Falls for Fourth Straight Week on Current-Account Deficit

Indonesia’s rupiah fell for a fourth week as the central bank reported the fourth quarterly current-account deficit in a row. Government bonds advanced.

The shortfall narrowed to $5.3 billion in the three months through September, from a revised record-high of $7.7 billion in the second quarter, Bank Indonesia said in a statement today. The balance of payments showed a surplus of $834 million for the period, compared with a revised deficit of $2.8 billion for April through June. There was a $12 billion surplus in the second quarter of 2011, central bank data show.

“The current-account deficit remains high and the balance-of-payments surplus is small compared to last year, which will weigh on the rupiah,” said Rully Nova, a currency analyst at PT Bank Himpunan Saudara 1906 in Jakarta. “The weaker rupiah will continue to support the trade balance, so we may see the current-account situation improve.”

The rupiah fell 0.2 percent this week to 9,632 per dollar as of 3:29 p.m. in Jakarta, prices from local banks compiled by Bloomberg show. The currency reached 9,668 on Nov. 7, the weakest level since October 2009, and was little changed today.

One-month implied volatility, which measures exchange-rate swings used to price options, dropped 20 basis points this week and today, to 4.80 percent, the lowest since September 2008. Bank Indonesia continues to stabilize the currency’s exchange rate according to its fundamentals, it said in a note on its website yesterday.

The yield on the government’s 7 percent bonds maturing in May 2022 dropped five basis points this week to 5.58 percent, the lowest level since March 2, according to prices from the Inter Dealer Market Association. The yield declined three basis points, or 0.03 percentage point, today.

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