Rupiah Suffers from Fears of Capital Outflows & Current Account Deficit

The Indonesian rupiah fell today as the announcement of quantitative easing tapering by the US Federal Reserve spurred capital outflow from the country, leading to concerns that the nation’s current account deficit may widen.

The Fed announced last week that it is starting to scale back its monetary stimulus. The announcement made investors flee risky assets, including currencies of emerging economies. The Indonesian current account has been in a deficit for two years. The rupiah has fallen 22 percent this year, the worst performance since 2000.

USD/IDR rose from 12,195.00 to 12,277.50 as of 9:53 GMT today.

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