The rupiah fell to a 17-year low as trade data trailed forecasts, suggesting an economic slowdown is worsening, and Bank Indonesia held its policy rate.
Exports declined 19.2 percent in July from a year earlier, the biggest drop since August 2012, according to official data released Tuesday. A 28.4 percent plunge in imports resulted in a $1.3 billion trade surplus. The figures don’t bode well for a pickup in growth this quarter after expansion slowed to the least since 2009 in the previous three months. The central bank kept its benchmark interest rate unchanged at 7.5 percent on Tuesday, as expected by all 17 analysts surveyed by Bloomberg.
“On the trade front, they were bad numbers and growth continues to be a big concern,” said Irene Cheung, a currency strategist at Australia & New Zealand Banking Group Ltd. in Singapore. This adds to a weakening bias for the rupiah that is already being harmed by the stronger dollar and the yuan’s devaluation, she said.
The rupiah declined 0.4 percent to 13,840 a dollar as of 3:40 p.m. in Jakarta, according to prices from local banks. It fell as low as 13,851 earlier, the weakest level since July 1998, and has dropped 10.5 percent this year. The Jakarta Composite Index of shares was down 1.7 percent to 4,507.890.
Bank Indonesia will maintain exchange-rate stability in the short term, it said after the rate decision.
The plunge in exports and imports compared with the median estimate for declines of 8.75 percent and 13.25 percent, respectively, in a Bloomberg survey. The trade surplus was the widest since December 2013.
“The main implication is that it suggests Bank Indonesia will no longer be too occupied with the current-account deficit problem,” Gundy Cahyadi, a Singapore based economist at DBS Group Holdings Ltd., said before the rate review.
The yield on the sovereign bonds due September 2026 was little changed at 8.66 percent, according to Inter Dealer Market Association prices.