JAKARTA (Bloomberg) - Indonesia's rupiah led declines in Asia and reached a 16-year low after the central bank signaled it may be comfortable with the losses to boost exports.
Bank Indonesia remains focused on guarding macroeconomic stability and sees the current exchange rate as competitive for exporters, Deputy Governor Perry Warjiyo said Tuesday. The nation needs to narrow the current-account deficit, Finance Minister Bambang Brodjonegoro told reporters March 10, adding that the rupiah's decline won't endanger the state budget.
"The focus is on the current account and growth, as the central bank sets no target for the rupiah," said David Sumual, chief economist at PT Bank Central Asia. Capital goods imports to support faster growth will need to rise, weighing on the rupiah, he said.
The rupiah fell 0.8 per cent to 13,193 a US dollar as of 10:17 a.m. in Jakarta, the weakest since August 1998, prices from local banks compiled by Bloomberg show. One-month non- deliverable forwards declined 0.6 per cent to 13,415, according to data compiled by Bloomberg.
Indonesia's exports contracted for four straight months through January, while the current account has been in deficit since 2011.
Government bonds due November 2020 declined, with the yield rising eight basis points, or 0.08 percentage point, to 7.47 per cent, according to the Inter Dealer Market Association. That's the highest level since Jan. 20.