Indonesia’s rupiah retreated from near a 33-month high as lingering doubts about Greece’s ability to resolve its debt crisis reduced demand for emerging-market assets.
Greece, which needs to raise 8.5 billion euros ($11.3 billion) before the end of May to cover maturing obligations, may be forced to draw on a 45 billion euro emergency aid package to trim the largest deficit in the European Union.
Strength in the rupiah was also capped by intervention by Bank Indonesia, said Ho Woei Chen at United Overseas Bank Ltd. in Singapore.
“There is certainly concern that the Greece issue won’t go away even if they get the funding, as the key is what yields they will have to pay and if it is sustainable,” said Ho, a regional economist at UOB. “BI is in the market but it’s not too aggressive. Still, it’s making people take stock of how much the rupiah has gained recently.”
The rupiah slipped 0.2 percent to 9,026 against the U.S. dollar as of 10:32 a.m. in Jakarta, according to data compiled by Bloomberg. The currency climbed to 8,990 last week, the strongest level since July 13, 2007.
“There is quite a bit of resistance for the rupiah around 9,000 on concerns about BI intervention to slow appreciation,” Ho said. The currency may trade between 9,000 and 9,050 for the rest of the week, Ho said.
Central banks intervene by arranging purchases or sales of currencies to try and influence exchange rates.
The rupiah may appreciate 0.8 percent to 8,950 per dollar by year-end, according to the median estimate in a Bloomberg News survey of analysts.
Greece began talks yesterday on activating the aid package and the International Monetary Fund called the country’s fiscal crisis a “wake-up call‚“ on sovereign-debt risks.
The cost of insuring against a default on Greek government debt through credit-default swaps surged 31 basis points to a record 495 points, according to CMA DataVision prices in London yesterday.
The yield spread between Greece’s benchmark 10-year bonds and German bunds reached an all-time high of 517 basis points. Germany is Europe’s biggest economy, and a bigger gap between the yields indicates a perception of higher risk for Greece.
Greece, which needs to raise 8.5 billion euros ($11.3 billion) before the end of May to cover maturing obligations, may be forced to draw on a 45 billion euro emergency aid package to trim the largest deficit in the European Union.
Strength in the rupiah was also capped by intervention by Bank Indonesia, said Ho Woei Chen at United Overseas Bank Ltd. in Singapore.
“There is certainly concern that the Greece issue won’t go away even if they get the funding, as the key is what yields they will have to pay and if it is sustainable,” said Ho, a regional economist at UOB. “BI is in the market but it’s not too aggressive. Still, it’s making people take stock of how much the rupiah has gained recently.”
The rupiah slipped 0.2 percent to 9,026 against the U.S. dollar as of 10:32 a.m. in Jakarta, according to data compiled by Bloomberg. The currency climbed to 8,990 last week, the strongest level since July 13, 2007.
“There is quite a bit of resistance for the rupiah around 9,000 on concerns about BI intervention to slow appreciation,” Ho said. The currency may trade between 9,000 and 9,050 for the rest of the week, Ho said.
Central banks intervene by arranging purchases or sales of currencies to try and influence exchange rates.
The rupiah may appreciate 0.8 percent to 8,950 per dollar by year-end, according to the median estimate in a Bloomberg News survey of analysts.
Greece began talks yesterday on activating the aid package and the International Monetary Fund called the country’s fiscal crisis a “wake-up call‚“ on sovereign-debt risks.
The cost of insuring against a default on Greek government debt through credit-default swaps surged 31 basis points to a record 495 points, according to CMA DataVision prices in London yesterday.
The yield spread between Greece’s benchmark 10-year bonds and German bunds reached an all-time high of 517 basis points. Germany is Europe’s biggest economy, and a bigger gap between the yields indicates a perception of higher risk for Greece.
