Although unconfirmed it is rumored that Indonesia’s central bank (Bank Indonesia) sold USD $500 million on Thursday (04/06) to slow the slide of the rupiah. Pressures on the rupiah are particularly caused by domestic US dollar demand rather than foreign investors pulling funds out from Indonesia. Dividend payouts to foreign stakeholders will continue until July and puts pressure on the rupiah.

Most emerging Asian currencies weakened on Friday (05/06) due to a rise in US and European bond yields. Indonesia’s 10-year government bond rose to around 8.5 percent from the level of 8 percent at the start of the month. The US 10-year Treasury bond yield touched an eight month high of 2.425 percent and therefore reduced the attractiveness of higher yields in emerging Asia.

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.37 percent to IDR 13,288 per US dollar on Friday (05/06).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Meanwhile, Greece postponed its debt repayment to the IMF, due on 5 June 2015, until the end of June but did vow to remain committed to stay in the Eurozone. However, the delay in debt repayment leads to heightened speculation that Greece’s financial situation is worse than expected.

Further Reading:

Stocks and Rupiah Update Indonesia: A Vicious Downward Spiral?