Indonesian intervention jeopardised in rupiah plunge

Hmm... previous one in '08 started by Thailand baht... will the history repeat with Indonesia rupiah this round...

Indonesian intervention jeopardised in rupiah plunge

SINGAPORE -- Indonesia is consuming foreign- currency reserves at the fastest pace in Asia as policy makers struggle to contain the rupiah’s plunge, a sign to Mandiri Sekuritas that the central bank will pare intervention, the Bloomberg news agency reported.

Reserves dropped 5.7 per cent in a year to US$105 billion (S$131.5 billion) in May as Bank Indonesia sold dollars to bolster the rupiah, while policy makers from South Korea to Taiwan added to coffers, data compiled by Bloomberg show. The rupiah fell to 5.6 per cent below the local spot rate in the offshore non-deliverable forward market yesterday, more than double the next-biggest discount among 34 emerging-market currencies tracked by Bloomberg.

http://www.todayonline.com/business/indo...iah-plunge

no matter how massive these big economies are, leakages remain rampant due to corruptions and hence emerging economies are likely to remain as emerging for a long time...

(12-06-2013, 09:33 PM)CityFarmer Wrote: Hmm... previous one in '08 started by Thailand baht... will the history repeat with Indonesia rupiah this round...

Indonesian intervention jeopardised in rupiah plunge

SINGAPORE -- Indonesia is consuming foreign- currency reserves at the fastest pace in Asia as policy makers struggle to contain the rupiah’s plunge, a sign to Mandiri Sekuritas that the central bank will pare intervention, the Bloomberg news agency reported.

Reserves dropped 5.7 per cent in a year to US$105 billion (S$131.5 billion) in May as Bank Indonesia sold dollars to bolster the rupiah, while policy makers from South Korea to Taiwan added to coffers, data compiled by Bloomberg show. The rupiah fell to 5.6 per cent below the local spot rate in the offshore non-deliverable forward market yesterday, more than double the next-biggest discount among 34 emerging-market currencies tracked by Bloomberg.

http://www.todayonline.com/business/indo...iah-plunge

The tom yam effect was actually 10 years earlier in 1998. Hope the mee bakso turns out fine this time around. Otherwise we could be affected too as we are deemed an emerging market and in the same neighbourhood even though our reserves are very strong.

(12-06-2013, 10:35 PM)swakoo Wrote: The tom yam effect was actually 10 years earlier in 1998. Hope the mee bakso turns out fine this time around. Otherwise we could be affected too as we are deemed an emerging market and in the same neighbourhood even though our reserves are very strong.

Yes, it should be in 1997-1998, rather on '08

My apologies...

Another currency crisis looming?

(13-06-2013, 09:07 AM)CityFarmer Wrote: My apologies...

Apologies not needed. Crises happen so fast and furious these days that our memory tends to get compressed - what happened years ago seem like took place only recently.

(13-06-2013, 09:15 AM)Dividend Warrior Wrote: Another currency crisis looming?

Extract from http://www.cnbc.com/id/100811476

Quote:Wild fluctuations in the Japanese yen over the past few days have been frightening, Dennis Gartman of The Gartman Letter said Wednesday.

"I haven't seen action like this since the days of Russian problems back in '97," he said. "These are scary times. I've been trading foreign exchange for a long time. These things frighten me, and I've got to tell you: I'm cutting my positions way down just because of the volatility's so large."

The tom yam effect spilled over as far as Russia in 97/98.

time to eat some sop buntut...

(13-06-2013, 10:49 AM)swakoo Wrote: The tom yam effect spilled over as far as Russia in 97/98.

I suppose you'll call this the 'Ayam Penyet' (a recent fav food of mine which I heard originated from Surabaya, Indonesia) effect or just "Penyet" in short, if it really triggers AFC-II... Will be very aptly named if so as 'Penyet' means Smashed or Flattened??

Since tom yam is a soup, technically sop buntut is more apt.

But since many of us are going to get smashed if it happens, then ayam penyet (smashed fried chicken) should get the vote.

Time to go to Lucky Plaza...

I will post follow-up news on Indonesia here, in the same thread, for the convenience of readers.

First monetary policy, after periodic intervention by central bank in FX trading market, to protect rupiah...

Indonesia central bank surprises with interest rate hike

JAKARTA – Indonesia’s central bank surprised the market for a second time this week by raising its benchmark interest rate, which had been unchanged for 15 months, by 25 basis points to 6 per cent on Thursday.

The decision follows Bank Indonesia’s unexpected hike late Tuesday night of its overnight deposit facility rate (FASBI) by 25 basis points to 4.25 per cent to try to bolster the weakening rupiah.

http://www.todayonline.com/business/indo...-rate-hike