Indonesian Rupiah Falls to Three-Week Low as Dollar Buying Seen

Indonesia’s rupiah fell to a three-week low after exports dropped more than estimated and as concern that Greece could leave the euro bolstered demand for the greeback.

The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, rose to the highest since 2009 after authorities in Athens said a victory for the main opposition party in elections slated for Jan. 25 may lead to a default and exit from the euro. The single currency dropped to the weakest level since 2006 after the European Central Bank signaled it will consider more monetary easing. Indonesia’s November exports fell the most in more than two years, data showed Jan. 2.

“With the new year starting and investors and traders setting up new positions, they may want to begin with dollar purchases,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Bank Ltd. in Tokyo. “Weak trade data from Indonesia may also be part of the negative factors for the rupiah.”

The Indonesian currency fell 1.1 percent to 12,684 per dollar as of 10:37 a.m. in Jakarta, according to prices from local banks. That’s the weakest level since Dec. 18. In the offshore market, one-month non-deliverable forwards dropped 1.5 percent to 12,811, data compiled by Bloomberg show. Bank Indonesia set a fixing used to settle the contracts at 12,589, compared with 12,474 on Jan. 2.

Overseas sales fell 14.6 percent in November from a year earlier, compared with the median estimate in a Bloomberg survey for a 4.5 percent decline. That contributed to a trade shortfall of $426 million, the widest since April.

The yield on the sovereign bonds due March 2024 rose nine basis points, or 0.09 percentage point, to 7.96 percent, according to figures from the Inter Dealer Market Association. That was the biggest increase since Dec. 15.

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