Indonesia’s rupiah declined for a fourth week after official data showed exports contracted for a third month and the trade deficit widened to the highest level since at least 2008. Government bonds advanced.
Overseas sales dropped 16.4 percent in June, the biggest decrease since September 2009, resulting in a trade shortfall of $1.3 billion, the Aug. 1 report showed.
Indonesia’s 2012 current-account deficit may be about 1.5 percent of gross domestic product, the most since 1997, according to DBS Group Holdings Ltd.
Falling prices of key commodities are hurting trade in the country, the world’s number one coal exporter and the largest producer of palm oil.
“There will be no meaningful improvement in the trade balance without a rebound in commodity prices, which is unlikely in the near term,” said Eugene Leow, an economist at DBS Group in Singapore. “The global situation is still dicey, so capital flows to finance the current-account deficit will be volatile.”
The rupiah declined 0.2 percent this week to 9,488 per dollar as of 9:33 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency dropped 0.1 percent on Friday morning.
One-month implied volatility, which measures exchange-rate swings used to price options, fell 50 basis points, or 0.5 percentage point, this week to 7.5 percent. It was unchanged on Friday morning.
The yield on benchmark 10-year bonds declined two basis points this week to 5.73 percent, data compiled by Bloomberg show. It reached 5.71 percent on July 31, the lowest since March 5, and climbed one basis point on Friday morning.