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Rupiah in Longest Losing Streak Since August on Fed Taper Bets

Nov. 6 (Bloomberg) -- Indonesia’s rupiah fell for a seventh day, the longest losing streak since August, and bonds dropped as U.S. economic data that topped estimates spurred bets the Federal Reserve will bring forward a planned stimulus cut.

Services growth in the world’s largest economy unexpectedly accelerated last month, beating forecasts for a slowdown, a report showed yesterday. Indonesia’s gross domestic product expanded 5.6 percent last quarter from a year earlier, the slowest pace since the last three months of 2009 and in line with the median estimate in a Bloomberg survey, official data showed today. The nation recorded trade deficits in seven of the first nine months this year.

“The rupiah is more exposed to the rising Fed tapering concern because of the weak external balance,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “The currency is likely to remain volatile until the year-end due to the uncertain global environment.”

The rupiah declined 0.5 percent from Nov. 4 to 11,410 per dollar as of 4:02 p.m. in Jakarta, prices from local banks show. It reached 11,430 earlier, the weakest level since Oct. 11. Local markets were shut yesterday for a holiday. One-month non-deliverable forwards slid 1.2 percent to 11,403 per dollar, trading 0.1 percent stronger than the onshore spot rate, data compiled by Bloomberg show.

A daily fixing used to settle the contracts was set at 11,259 per dollar, from 11,138 on Nov. 4, according to the Association of Banks in Singapore. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 15 basis points, or 0.15 percentage point, to 13.84 percent.

The yield on the nation’s 5.25 percent bonds due May 2018 climbed 11 basis points to 7.41 percent, the highest level since Oct. 11, prices from the Inter Dealer Market Association show. The government raised 8 trillion rupiah ($701 million) by selling three-month through 20-year notes, meeting its target, according to a statement on the Finance Ministry’s website.

To contact the reporter on this story: Yudith Ho in Jakarta at yho35@bloomberg.net

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

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