Reply #10: Rupiah Posts Weekly Drop as Overseas Funds Trim Share Holdings [View All]

http://www.thejakartaglobe.com/business/rupiah-posts-weekly-drop-as-overseas-funds-trim-share-holdings/443577

The rupiah recorded its biggest weekly decline since January after overseas investors reduced holdings of the nation’s shares for a fourth day yesterday. Bonds advanced this week.

Global funds sold $257 million more local stocks than they bought this week through yesterday, exchange data show. The Jakarta Stock Exchange fell 1.1 percent this week, the most since March.

The currency, which rallied for a third month in April, weakened 0.1 percent this month after Bank Indonesia left its benchmark interest rate unchanged at 6.75 percent during a review on May 12. Consumer spending in the U.S. eased more than previously estimated in the first quarter, data showed yesterday.

“There’s overall risk aversion not just because of Europe’s debt crisis but there’s also concern about U.S. growth,” said Johanna Chua, Hong Kong-based head of Asian economic research at Citigroup Inc. “In the near term there could be a little bit of bounce to go because of all the uncertainties.”