Indonesia rupiah hits 17-year low; intervention eyed

[SINGAPORE] The Indonesian rupiah hit a fresh 17-year low on Thursday as solid US housing data added to expectations the Federal Reserve with hike interest rates as soon as September.

The rupiah eased as much as 0.2 per cent to 13,395 per dollar, its weakest since August 1998. The Indonesian currency stood at 13,385 as of 0107 GMT, compared to the previous close of 13,375.

The dollar resumed strength as US home resales rose in June to their highest level in nearly 8-1/2 years.

Caution grew over possible intervention by Bank Indonesia (BI) to prop up the rupiah, the second-worst performing Asian currency this year after the Malaysian ringgit.

BI Deputy Governor Mirza Adityaswara said on Wednesday the central bank is always in the foreign exchange market, especially when the rupiah is undervalued.

Chief economics minister Sofyan Djalil said that it is important to keep the rupiah in an "acceptable range" that reflects economic fundamental.

REUTERS