The rupiah weakened past 12,000 per dollar for the first time since February as importers hoarded dollars to meet future payments amid concern a surge in oil prices will worsen Indonesia’s trade balance.
The currency slid 0.9 percent to close at 11,997 per dollar, prices from local banks show. It reached 12,027 earlier, the lowest level since Feb. 13. The rupiah has lost 2.7 percent this month, the most in Asia, as an official report showed the nation’s trade deficit reached a nine-month high of $1.96 billion in April.
Indonesia’s oil and gas imports, which made up 23 percent of all shipments in April, rose even as total overseas purchases contracted for a seventh month. Brent crude climbed to a nine-month high of $114.69 per barrel on June 13 and has since eased 1 percent as Iraqi forces clashed with militants near Baghdad.
“There’s some fear-driven buying by corporates wanting to secure dollars for import needs and future needs,” said Billie Fuliangsahar, head of treasury at PT Rabobank International Indonesia in Jakarta. “Rising oil will drag dollar-rupiah higher too, so there’s concern over further rupiah weakness.”
In the offshore market, one-month non-deliverable rupiah forwards slid 0.9 percent to 12,048, 0.4 percent weaker than the onshore spot rate, data compiled by Bloomberg show.
One-month implied volatility, a measure of expected swings in the exchange rate used to price options, increased 22 basis points, or 0.22 percentage point, to 9.61 percent. Bank Indonesia set a fixing used to settle the rupiah forwards at 11,978 per dollar, compared with 11,863 yesterday.
The yield on the government’s 8.375 percent bonds due March 2024 climbed five basis points to 8.11 percent, the highest level since March 27, according to the Inter Dealer Market Association.