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Rupiah Slides to Four-Year Low, Bonds Decline Before Fed Minutes

Published: 28/08/2013 07:24:12 AM GMT
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Indonesia's rupiah fell to a four-year low and government bonds declined on concern the U.S. is preparing to scale back policies that helped boost dem (more)

Indonesia's rupiah fell to a four-year low and government bonds declined on concern the U.S. is preparing to scale back policies that helped boost demand for emerging-market assets.

The yield on 10-year debt rose to the highest level since March 2011 before the Federal Reserve publishes today minutes of its July meeting that may show whether it plans to reduce its asset purchases as early as next month. Bank Indonesia will remain in the currency and bond markets to stabilize the rupiah, which is under pressure due to the Asian nation's current-account deficit and the prospect of Fed stimulus reduction, Deputy Governor Perry Warjiyo said late yesterday.

"Most of the domestic negative stories have been priced in, but the impact of FOMC minutes is still a concern," said Handy Yunianto, head of fixed-income research at PT Mandiri Sekuritas, unit of nation's largest bank. "The central bank is allowing rupiah weakness to reduce imports and improve the current account."


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