Indonesia's rupiah at 5-year low, Thai baht weakens as US Fed meets
Published on Dec 18, 2013 2:08 PM
SINGAPORE (Reuters) - The Indonesian rupiah fell half a per cent to hit its lowest levels since 2008 against the dollar on Wednesday, losing the most in Asia as investors cut positions just hours before the Federal Reserve ends a policy meeting that could decide when and how fast US monetary policy will be tightened.
The rupiah, deemed Asia's most vulnerable to a turn in the Fed's five-year quantitative easing policy because of Indonesia's dependence on foreign portfolio flows, fell to a low of 12,175 per dollar, according to Thomson Reuters data.
The relatively lower volatility in offshore rupiah non-deliverable forwards suggested domestic factors were driving the weakness in the rupiah, which is Asia's weakest currency this year with losses of more than 20 per cent.
Trading onshore was characterised by a lack of liquidity and a dearth of dollar supply as market participants positioned for further rupiah weakness. The country's vice finance minister said the economy should brace for a weaker currency.
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