Indonesia Rupiah Falls Most in Seven Months on Rising Oil Prices

The Indonesian rupiah declined by the most in seven months as rising hurt sentiment for the nation’s assets.

The currency dropped as much as 0.8% to 17,310 per dollar on Thursday, the largest single-day drop since September . The rupiah has fallen almost 2% in April to underperform emerging Asian currencies.

The benchmark dropped more than 1%. Ten-year bond yields rose 8 basis points to 6.68%.

Sentiment on Indonesia has worsened this month as elevated oil prices pile pressure on the nation’s current-account and fiscal health. The cost of government subsidies for fuel and cooking gas are rising, adding to longstanding fiscal worries since President Prabowo Subianto took office and unveiled billions of dollars of spending plans.

“Increasing concern regarding Indonesia fiscal condition” is putting pressure on the rupiah, said Wee Khoon Chong, senior APAC market strategist at BNY in Hong Kong. There are also questions about “the effectiveness of Bank Indonesia intervention strategy amidst strong dollar and heightened uncertainties in the macro environment,” he said.

BI Governor Perry Warjiyo on Wednesday pledged to both offshore and onshore intervention to support the currency.