Rupiah weakens past 15,000 per dollar for first time since 1998

The rupiah has dropped 10% to the dollar this year despite four rate hikes; policymakers plan to increase tourism receipts, greater use of biodiesel to stem expenditure on oil imports and come up with strategies relating to imports and exports.

BENGALURU: The Indonesian rupiah fell to its weakest in more than 20 years and other emerging Asian currencies also  slid on Tuesday as the dollar held its overnight gains rooted in the striking of a revised North American trade pact. 

Appetite for the dollar was underpinned by U.S. Treasury yields, which rose modestly on Monday.

"The greenback may continue to hold the upper hand in Asia despite the apparent pick up in global risk appetite levels, with crude also continuing to climb," OCBC said in a note.

The Singapore bank said net portfolio flows showed "moderating inflow momentum" for the South Korean won, Taiwan dollar and Thai baht, while outflow momentum for the currencies of India, Indonesia and the Philippines continued.

The rupiah plunged nearly 0.8 percent to 15,021 to the dollar, breaching the 15,000 level for the first time since 1998 and suffering the biggest decline among regional currencies. 
     
The Thai baht, which strengthened the past three sessions, lost about 0.37 percent against the dollar. The currency is best performer among peers this year, 
    
The won was about 0.5 percent weaker, while the Taiwan dollar shed 0.16 percent. The Philippine peso lost about 0.18 percent.

The Sri Lankan rupee, which fell nearly 5 percent in September, hovered around a record low after the central bank surprised markets by leaving its key rates unchanged.

Chinese markets are closed until next week, while Indianmarkets were also shut on Tuesday, for a holiday.
    
    INDONESIAN RUPIAH
    
In breaching 15,000, the rupiah reached levels last seen in the Asian financial crisis. 
    
A falling rupiah has prompted government and central bank moves to stabilise the currency, including steady policy tightening as well as attempts to curb imports. A drop in risk appetite, as well as fears over a global trade spat have weighed on the rupiah.

"I think its more of a sentiment issue," said Taye Shim, head of research at Mirae Asset Sekuritas in Indonesia, citing global uncertainties and factors.
   
 "It's beyond Indonesia's control to manage those kind ofuncertainties, and all they can do is to counter these measures
internally." 
    
The rupiah has weakened nearly 10 percent against the dollar this year. - Reuters