Rupiah seen to weaken as inflow from tax amnesty ends

Kuala Lumpur

THE rupiah's reign as South-east Asia's best currency is set to be short-lived as the supportive inflow from a US$12.3 billion tax amnesty programme is about to be slammed shut.

The currency will slump more than 2 per cent by March 31 as the market's focus returns to Indonesia's current account deficit and as rising US interest rates lure money away from emerging markets. Bank of Tokyo-Mitsubishi UFJ Ltd said that the rupiah will suffer as the US dollar strengthens, while Standard Chartered plc predicted that the currency will drop through the first half as the deficit widens.