Rupiah Weakens Most in a Week on Current Account; Bonds Steady
September 05, 2012
Indonesia's rupiah fell the most in more than a week on concern the current-account deficit will widen from a record as a global economic slowdown hurts exports.
Overseas shipments contracted 7.3 percent in July from a year earlier in a fourth month of declines, and were $177 million less than imports, official figures released this week show. The shortfall in the current account, the broadest measure of trade, was $6.94 billion last quarter. The deficit fueled losses in the rupiah, which slid 1.5 percent last month in the worst performance among Asian currencies, central bank Governor Darmin Nasution said yesterday.
"It will be difficult for the trade deficit to return to surplus this year, depending on global conditions," said Gusti Kahari, a foreign-exchange dealer at Bank Artha Graha Internasional in Jakarta. "The rupiah has room to strengthen as Indonesia's fundamentals are still solid aside from the current account."
The rupiah weakened 0.2 percent to 9,590 per dollar as of 9:35 a.m. in Jakarta, the most since Aug. 24, prices from local banks compiled by Bloomberg show. The currency reached 9,592 yesterday, the weakest level since May, and weakened 1.5 percent in August. One-month implied volatility, which measures exchange-rate swings used to price options, held at 6.5 percent.
The yield on the government's 7 percent bonds due May 2022 was little changed at 6.06 percent, the lowest level since Aug. 23, prices from the Inter Dealer Market Association show.
Rupiah Falls as Import Growth Slows, Exports Drop; Bonds Steady
September 04, 2012
Indonesia's rupiah declined as data showed imports increased by the least since November 2009 and exports contracted for a fourth month, signs Europe's debt crisis is hurting the local economy.
Goods purchases climbed 0.75 percent in July from a year earlier, narrowing the trade deficit to $177 million, the smallest since the nation last posted a surplus in March, the statistics bureau reported yesterday. Falling overseas shipments helped make the rupiah Asia's worst-performing currency last month as it dropped 1.5 percent. Bonds were little changed.
"The rupiah will continue to underperform regional currencies," said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore. "This isn't a turnaround and we may see the trade deficit widen again."
The rupiah weakened 0.1 percent to 9,577 per dollar as of 8:57 a.m. in Jakarta, the biggest loss since Aug. 30, according to prices from local banks compiled by Bloomberg. One-month implied volatility, which measures exchange-rate swings used to price options, was unchanged at 7.25 percent and up from 7 percent a week ago.
Exports decreased 7.3 percent in July, compared with a 16 percent contraction the previous month, the government reported. The trade shortfall reached $1.3 billion in June.
The yield on the government's 7 percent bonds due May 2022 was little changed at 6.10 percent, prices from the Inter Dealer Market Association show.
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