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Rupiah Drops to Six-Year Low as Central Bank Signals Weakness

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The rupiah dropped to a six-year low after Bank Indonesia signaled it will tolerate a weaker currency to boost exports.

The rupiah fell for a second day after central bank Governor Agus Martowardojo said Friday he sees further depreciation as improvements in the U.S. economy boost the dollar. The local currency’s weakness is “beneficial” in lowering imports and improving export competitiveness, Bank Indonesia said in February. China, Indonesia’s largest trading partner, cut interest rates over the weekend, sending the yuan to a two-year low versus the greenback Monday.