SINGAPORE: The Indonesian rupiah fell amid strong dollar demand from importers on Tuesday, with one-month non-deliverable forwards hitting their weakest level in more than three years, while most of its Asian peers edged higher on a firm Chinese yuan.
The spot rupiah's indicative price slid 0.7 percent to 9,730 per dollar on exchange pages, but it traded softer at 9,830, dealers said.
One-month dollar/rupiah NDFs hit 9,877, its highest since September 2009, putting more pressure on the rupiah spot.
While local importers kept chasing dollars, exporters continued to keep dollar holdings to sell at higher prices, dealers said.
The central bank was spotted selling dollars, they added.
"IDR has been significantly more volatile over the past couple of weeks, showing signals of depreciatory pressure, suggesting that portfolio outflow stresses in the context of weak current account dynamics may once again be the culprit," Sacha Tihanyi, senior currency strategist for Scotiabank, said in a research note.
"With domestic growth remaining well-stoked, imports are still too strong relative to external demand, and portfolio flows may not be enough to fill the gap."
Indonesia posted a current account deficit of $21.5 billion in 2012, or 2.4 percent of gross domestic product, Finance Minister Agus Martowardojo said on Monday.
Some foreign investors showed interest in long-term bonds, but it is premature to expect more bond inflows, dealers said.
Foreign ownership in Indonesian local government bonds rose above 33 percent as of Jan. 4, according to the government's data.
"Long term yields are still good. But we are watching a possible hike in electricity tariff," said a Jakarta-based currency dealer, adding some investors stayed concerned over inflation.
Indonesia plans to cut power subsidies this year by raising electricity tariffs.
Worries about the country's inflation caused bond outflows, forcing the rupiah to become the worst performing emerging Asian currency last year.
TAIWAN DOLLAR
The Taiwan dollar advanced on demand from exporters for settlements.
Domestic exporters chased the Taiwan dollar when it was softer than 29.000 to the U.S> dollar, dealers said.
But the island unit's upside was capped as foreign financial institutions sold it amid weaker stocks.
PHILIPPINE PESO
The Philippine peso gained as local banks were looking to buy it on expectations of further stock inflows and on demand linked to remittances from overseas workers.
Investors stayed cautious over potential central bank intervention, but the peso is still in a bullish trend, dealers and analysts said.
The central bank's measures such as putting limits on banks' non-deliverable forwards (NDFs) exposure and keeping foreign funds out of its short-term special deposit accounts are temporarily slow inflows, they added.
In addition, the drop in one-year dollar/peso forwards to nearly zero suggests offshore investors are shovelling in more funds on the country's strong economic fundamentals.
"The peso is still pretty much in a range, especially after stocks broke 6,000 yesterday," said a foreign bank dealer in Manila, referring to the country's main stock index.
"But dollar/peso feels heavy on the upside as a lot of players are still looking to sell the rallies," the dealer said, adding the peso is seen heading to 40.70 per dollar by the end of January.
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