Rupiah Drops Most in a Month as Commodities Slump With Stocks

  • Indonesia's benchmark equity gauge declines for a second day
  • More than half of nation's exports related to commodities: UOB

Indonesia’s rupiah was set for its biggest drop in a month on speculation a renewed decline in global commodity prices will deepen an export slump.

The Bloomberg Commodity Index headed for its biggest three-day loss since August after two successive weeks of gains. The gauge sank 25 percent in 2015 amid slowing demand from top consumer China. Overseas shipments from Indonesia, the world’s biggest palm oil grower and thermal coal exporter, fell for a 15th straight month in December. The Southeast Asian nation’s benchmark equity gauge was poised for its steepest two-day retreat since Jan. 21.

“Indonesia is very exposed to commodities in terms of exports and there is a perceived impact on the currency,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore. “More than 50 percent of its exports are related to commodities.”

The rupiah weakened 0.9 percent to 13,815 a dollar as of 10:45 a.m. in Jakarta, set for its biggest decline since Jan. 4, according to prices from local banks compiled by Bloomberg. Global funds sold $14.5 million more Indonesian shares than they bought on Tuesday, the first outflow in six days.

The yield on the nation’s 10-year notes increased two basis points to 8.13 percent, Inter Dealer Market Association prices show. The two-year yield rose four basis points to 7.85 percent.

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