Rupiah heads for biggest drop since 2011, leading the slide in Asian currencies as US dollar surges

A teller in Bank Indonesia's headquarters counting rupiah bank notes in Jakarta, Indonesia, on April 21, 2016.
A teller in Bank Indonesia's headquarters counting rupiah bank notes in Jakarta, Indonesia, on April 21, 2016. PHOTO: REUTERS

KUALA LUMPUR (BLOOMBERG, REUTERS, AFP) - Indonesia's rupiah was poised for its biggest drop in five years on Friday (Nov 11) after a rally in the US dollar sapped demand for emerging-market assets.

The rupiah sank 2.6 per cent to 13,488 per US dollar as of 8:43am in Jakarta, set for the biggest decline since September 2011, according to prices from local banks compiled by Bloomberg. It dropped as much as 3 per cent.

The Philippine peso fell to a seven-year low, down 0.5 per cent to 48.925 per dollar as of 0158 GMT, its weakest since September 2009.

The South Korean won fell to its lowest level in more than four months, trading at 1,168.4 to the dollar as of 0219 GMT, down 1.6 per cent from the previous close of 1,150.6. It was the lowest level since June 29, 2016.

China weakened the yuan's reference rate to beyond 6.8 to the dollar for the first time in more than six years on Friday (Nov 11) as the greenback rebounded strongly, with analysts warning the unit could drop further.

The People's Bank of China set the value of the yuan - also known as the renminbi - at 6.8115 to the greenback, down 0.34 per cent from Thursday's fixing, according to data from the Foreign Exchange Trade System.

Developing-nation currencies are tumbling as the prospect of increased spending under a Donald Trump administration propelled the Bloomberg Dollar Spot Index to the highest since March on Thursday.

"There's thin liquidity and strong dollar sentiment," said Wu Mingze, a foreign-exchange trader in Singapore at INTL FCStone Inc., a Nasdaq-listed global payments-service provider. "Emerging markets are going full crazy at the moment. It's not central bank intervention or any major news."