Indonesia’s rupiah fell for a second day and stocks slumped on concern Europe’s sovereign debt crisis is spreading to its largest economies, reducing demand for emerging-market assets.
The MSCI Asia-Pacific Index of regional shares dropped by the most in almost a month after yields on Italy’s and Spain’s 10-year bonds climbed to the highest levels in at least a decade even amid European Union efforts to prevent a Greek default. Bank Indonesia will keep its benchmark lending rate at 6.75 percent today, after raising it by a quarter percentage point in February, according to all 14 economists surveyed by Bloomberg.(source)
“The entire euro-zone concerns have returned and people are now talking about Italy probably in trouble,” said Gundy Cahyadi, a Singapore-based economist at Oversea-Chinese Banking Corp.
The rupiah declined 0.2 percent to 8,553 per dollar as of 9:41 a.m. in Jakarta, according to data compiled by Bloomberg. The Jakarta Composite Index of stocks lost 1 percent, the biggest drop since June 16.
Indonesia’s government will auction 1 trillion rupiah ($117 million) of Islamic bonds that mature in 2017, 2025, 2030 and 2036 today, according to a statement from the Finance Ministry’s debt management office.
Ten-year notes fell yesterday, snapping eight days of gains. The yield on the 8.25 percent debt due July 2021 climbed three basis points, or 0.03 percentage point, to 7.28 percent, according to prices from the Inter-Dealer Market Association.
To contact the reporter on this story: Suryani Omar in Jakarta at somar6@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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