Indonesian’s Rupiah’s Freefall May Be About to Get Even Faster
- Rupiah is Asia’s worst performer this year on fund outflows
- Stock trading halted for third time in a week as rout deepens
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Indonesia’s currency has been in a free-fall, even defying the central bank’s intense market intervention. The decline may now gather further pace as demand for dollars climb from companies set to repatriate dividends.
With the foreign investors adopting a flight-to-quality approach, even the high real returns on Indonesian sovereign bonds won’t be enough to stop the rush to exit, according to I Made Budhi Purnama Artha, head of treasury at Maybank Indonesia in Jakarta. Bank Indonesia should pump in more dollars to prevent the rupiah from declining further and protect investor confidence, he said.