Indonesia's rupiah fell by the most in three weeks on speculation the central bank is allowing the onshore rate to weaken toward offshore-forward leve (more)
Indonesia's rupiah fell by the most in three weeks on speculation the central bank is allowing the onshore rate to weaken toward offshore-forward levels to boost exports. Government bonds advanced.
The currency slid 1 percent to 11,345 per dollar as of 4:01 p.m. in Jakarta, the biggest drop since Aug. 20, according to prices from local banks. In the offshore market, the rupiah's one-month non-deliverable forwards were unchanged at 11,488, 1.2 percent weaker than the spot rate, data compiled by Bloomberg show. That compares with a 5 percent average discount in the past two weeks.
The trade deficit widened to a record $2.3 billion in July, weighing on the current-account shortfall, which reached $9.8 billion in the second quarter, the largest in data compiled by Bloomberg going back to 1989. The current-account gap will narrow this quarter as the economy slows after Bank Indonesia raised borrowing costs by 1.25 percentage points in the last three months, Finance Minister Chatib Basri said last week.
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