Rupiah Forwards Fall to Lowest Since April 2009 on Import Quotas

Rupiah forwards fell to a four-year low on concern government measures to tackle inflation will weigh on the trade deficit, which reached a record in July.

One-month non-deliverable forwards dropped 1.9 percent to 11,850 per dollar as of 4:40 p.m. in Jakarta, trading 6.2 percent weaker than the spot rate, which was unchanged at 11,125, prices from local banks compiled by Bloomberg show. That’s the biggest gap since Aug. 27, when it touched 6.6 percent, the widest since September 2011. The contracts reached 11,888 earlier, the lowest level since April 2009.

Indonesia scrapped import quotas for beef, chillies and shallots to restrain consumer-price gains, the Jakarta Globe reported yesterday, citing Trade Minister Gita Wirjawan. The trade shortfall surged to $2.3 billion in July as purchases from overseas increased 6.5 percent and exports fell for a 16th month, official data showed this week. Inflation accelerated to 8.79 percent in August, the fastest since January 2009.

“There’s some skepticism on the onshore rates as they can be quite different to prices you actually get onshore,” said Roy Teo, a currency strategist at ABN Amro Bank NV in Singapore. “The trade deficit will remain at elevated levels as the government increases imports to address inflation.”

The fixing used to settle the forwards was set at 11,556 per dollar, from 11,491 yesterday, 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 59 basis points, or 0.59 percentage point, to 19.51 percent, according to data compiled by Bloomberg.

Wide Spread

“The bid-and-offer spread for the onshore rupiah is very wide as people are trying to find which rates are more reflective of the market,” said Mika Martumpal, head of treasury research and strategy at PT Bank CIMB Niaga in Jakarta. Banks may offer to sell dollars at about 11,500 rupiah and buy them at 11,000 rupiah, compared with a difference of about five to 10 rupiah during normal market conditions, he said.

The yield on sovereign bonds due May 2023 rose four basis points to 8.81 percent, according to prices from the Inter Dealer Market Association.

Indonesia will offer notes due March 2024 in exchange for securities maturing in 2013 through 2018 in a debt swap today, according to a statement on the debt management office’s website.

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