Sign up | Log in



Home  >>   Daily News  >>   Indonesia News  >>   Finance  >>   Indonesian rupiah at three-year low
NEWS UPDATES Asean Affairs   14 December 2012 

Indonesian rupiah at three-year low


The Indonesian currency continued to face pressure yesterday, falling near a three-year low, due to a surge in demand for US dollars for year-end payments and an increase in foreign fund outflows from the local equity market.

The rupiah weakened 0.4 per cent to 9,665 per dollar as of 5:22pm yesterday, prices from local banks compiled by Bloomberg showed. The currency touched 9,733 on Monday, its lowest level in three years.

Currency analysts said the fall in the Indonesian currency was caused by year-end dollar purchases and the increase in foreign fund outflows from the country's stock market.

Overseas investors sold US$160 million more in local stocks than they bought this month through Monday, following net sales of $319 million in November, according Bloomberg. The Indonesian Stock Exchange's (IDX) Composite Index fell 0.4 per cent yesterday.

"There's nothing to worry about. Dollar demand is always high as the year's end approaches," Bank Indonesia, the country's central bank, spokesman Difi Johansyah said in Jakarta yesterday. He said the demand for dollars was usually higher before the end of the year as foreign companies had an obligation to transfer part of their profits to their parent companies overseas. "These companies have to buy dollars for repatriation," he added.

Other analysts attributed the rupiah's fall to rising concerns about the further widening of the country's current account deficit. In the third quarter of this year, the deficit touched $5.3 billion, or 2.4 per cent of the nation's gross domestic product (GDP), a slight recovery from the second quarter figure of $7.7 billion (3.5 per cent of GDP).

"BI expects FDI [foreign direct investment] and other foreign fund inflows to offset the current account deficit. We disagree," wrote Prakriti Sofat and Joey Chew, analysts with Barclays Capital, in a research note distributed yesterday. They were referring to the fact that BI expected the deficit to narrow to 2.2 per cent of GDP by the end of this year.

According to Barclays, the current account deficit would grow at a "sizeable" 2.5 per cent of GDP this year due to inadequate FDI and portfolio flows, before improving slightly to 2.1 per cent in 2013. They forecast the rupiah would average around 9,900 in the next 12 months.

Concerns about a widening current account deficit were "exaggerated", BI Governor Darmin Nasution said, adding that the weakening rupiah was a cyclical trend caused by the increasing demand for dollars before the new year.

The central bank held its benchmark rate unchanged yesterday at 5.75 per cent for the 10th consecutive month, in line with analysts' expectations.

Concerns over the further depreciation of the rupiah in the long term also emanate from the government's plan to considerably reduce the amount of foreign debt next year. The President's National Economic Committee (KEN) has warned that Indonesia would need to convert 19.4 trillion rupiah ($2.02 billion) into US dollars to fulfil such an objective, a situation that could trigger "disturbances in the currency market".

In response, the Finance Ministry's interim head of fiscal policy, Bambang Brodjonegoro, said, "We will cooperate with BI to maintain the dollar supply in the market [because] if we splash 19 trillion rupiah on dollars at one time, then the supply may not be enough.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
  Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories    14 December 2012  
Subsribe Now !
• Thailand’s Richest to grow richer on economy’s 6% growth  Subcribe: Asean Affairs Global Magazine
• Philippines faces bright economic prospects for 2013 Asean Affairs Premium
• International investors favor status quo in power in Malaysia
• Korean firms interested in making halal cosmetics
Research Reports
on Thailand 2007-2008

•Textiles and Garments Industry

•Coffee industry

•Leather and footwear industry

•Shrimp industry

• IMF says Malaysia’s economic outlook stable
• Indonesian rupiah at three-year low
 • Mekong energy integration prioritises Cambodia, Laos and Myanmar
Asean Analysis              12 December 2012      Advertise Your Brand
• Asean Analysis- December 12, 2012  
• Asean Weekly-  December 7, 2012 Sponsor Our Events

Asean Stock Watch      13 December 2012   

• Asean Stock Watch- Demcember 13, 2012 

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent

• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand