Wednesday, March 9, 2011
RUPIAH SNAPS THREE DAY RALLY ON INFLATION
Indonesia’s rupiah fell, snapping a three day advance, on speculation oil prices around a 29 month high will hurt economic growth and stoke inflation. Bonds declined.
Crude oil in New York has climbed 15.1 percent this year on concern political turmoil in the Middle East and North Africa will escalate, disrupting global supplies. The fuel was trading at US$104,8 as of 4:49 p.m. Jakarta time, after touching $106.95 a barrel this week, the highest level since September 2008.
“Higher energy prices will cause other prices to increase, and this will probably have a negative impact on consumption and growth,” said Mika Martumpal, a senior market analyst at PT. Bank Commonwealth in Jakarta. “It’s something that not just Indonesia has to monitor, but other economies as well”.
The rupiah lost 0.1 percent to 8,788 per dollar as of 4:50 p.m. in Jakarta, according to data compiled by Bloomberg. The currency has gained 2.2 percent this year, the best performance among Asia’s 10 most traded currencies.
Meanwhile, the Philippine peso and Malaysia’s ringgit led declines in Asian currencies on speculation unrest in the Middle East and North Africa will push oil prices higher, threatening global economic growth.
“The money market is cautious about talking on risk because higher oil prices from the Middle East tension could affect the region’s economies,” said Akira Banno, a treasury advisor at Bank of Tokyo Mitsubishi UFJ Bhd. In Kuala Lumpur. “It’s working against risk appetite.”
The peso dropped 0.4 percent to 43.46 per dollar as of the 4 p.m. close in Manila, according to Tullett Prebon Plc. The ringgit fell 0.2 percent to 3.0320, the Singapore dollar declined 0.3 percent to S$1.2676 and China’yuan lost 0.07 percent to 6.5679.
The ringgit weakened for a second day on concern slowing economic growth will make the central bank less likely to raise borrowing costs later this week.
The currency retreated from near a 13 year high before a report this week that economics surveyed by Bloomberg predict will show factory output grew in January at the slowest pace in 14 months, months. Exports rose 3 percent in January from a year earlier, the least in three months, the trade ministry said on March 4. Malaysia’s gross domestic product increased 4,8 percent in the fourth quarter from a year earlier, the slowest growth in a year.
Bank Negara Malaysia will keep its overnight rate at 2.75 percent when it meets on March 11, according to 15 of 19 economists in a Bloomberg survey. Four predicted in increase to 3 percent. Policy makers have not changed the rate since July.
The peso declined for a second day before a report on March 10 that may say growth in exports slowed in January. Overseas sales increased 20.3 percent from a year earlier after having climbed a revised 26.5 percent the previous month, according to a Bloomberg survey of economists.
China’s yuan fell the most in more than a week after Commerce Minister Chen Deming rejected calls for faster appreciation that countries including the US say would help remedy global trade imbalances.
The central bank set the reference rate for yuan trading weaker for the first time in four days. It is “totally unreasonable” to say the yuan is undervalued, and China does not use its exchange rate to gain a competitive advantage, Chen said yesterday at the National People’s Congress.
Elsewhere, Thailand’s baht strengthened 0.2 percent to 30.37, South Korea’s won gained 0.1 percent to 1,117.82,while Taiwan’s dollar was little changed at NT$29.437.
1. Currency = mata uang
2. Speculation = Spekulasi, untung untungan
3. Economic Growth = Pertumbuhan Ekonomi
4. Consumption = Konsumsi
5. Bond = Perjanjian
6. Inflation = Inflasi, turunnya nilai mata uang
7. Trading = diperdagangkan
8. Prices = Harga
9. Market = Pasar
10. Export = Ekpor
11. Gross Domestic Product = Produk Dalam Negeri Kotor (bukan Net)
12. Overseas sales = Penjualan Luar Negeri
13. Commerce Minister = Menteri Perdagangan
14. Competitive Advantage = Keuntungan yang dapat bersaing
15. Global Economic Growth = Pertumbuhan Ekonomi Global
16. Region’s Economies = Ekonomi Negara
17. Factory Output = Produk Industri
18. Global Trade = Perdagangan Global
