The rupiah fell the most in almost two weeks as the prospect of a Greek default or exit from the euro damped demand for emerging-market assets.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 peers, rose to the highest level Wednesday in data going back to 2004 as euro-region finance ministers failed to agree on how to keep bailout funds flowing to Greece. The rupiah touched the weakest level in almost two months before Bank Indonesia reports fourth-quarter figures on Friday for the current account, which has stayed in deficit since late 2011.
“The dollar index is now at a high in this cycle,” said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group in Singapore. “The rupiah is one of those following the strong dollar picture.”
The rupiah fell 0.6%, the most since Jan 30, to 12,794 a dollar as of 4.14pm in Jakarta, prices from local banks show. It touched 12,840, the weakest level since since Dec 16. In the offshore market, one-month non-deliverable forwards dropped 0.3% to 12,924, data compiled by Bloomberg show. Bank Indonesia set a fixing used to settle the contracts at 12,794, compared with 12,700 on Wednesday.
Greece’s bailout package will expire this month if the euro area’s most indebted nation can’t reach a deal with its creditors. Such a lapse would put Greece at risk of default or leaving the euro. Talks resume next week.
Falling prices for key commodity exports from Southeast Asia’s largest economy, such as coal and palm oil, have pressured Indonesia’s trade balance. Exports dropped in each of the three months through December.
The yield on the government bonds due September 2025 increased six basis points, or 0.06 percentage point, to 7.47%, according to the Inter Dealer Market Association.