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Bloomberg
The Indonesian rupiah slumped to a seven-week low as traders positioned for a policy decision due on Thursday and concern about rising domestic virus infections damped sentiment.
The rupiah dropped as much as 1% to 14,597 per dollar, the weakest level since May 29. BI is forecast to cut its key rate by 25 basis points to 4.00%.
“If BI does cut policy rate, and external environment remains volatile, it could be a modest dampener for IDR prospects going ahead,†said Yanxi Tan, a foreign exchange strategist at Malayan Banking Bhd. in Singapore.
Indonesia’s capital city of Jakarta is expected to decide this week whether it will return to a full lockdown amid a rising number of coronavirus cases. It had extended a transition period to exit from a partial lockdown by two weeks on July 1.
“Concerns over Jakarta potentially seeing tighter restrictions again, and possibly also a somewhat lagged adverse reaction to the negative US-China headlines,†weighed on the rupiah, Yanxi Tan said in a statement.