T

he rupiah took another hit on Thursday as foreign fund withdrawal continued in the equity and debt markets amid fears that the US central bank would go ahead with its plan to reduce its monetary stimulus.

The Indonesian currency forwards fell again on speculation that the US Federal Reserve (Fed) would scale down its stimulus program, which has contributed to the massive inflow of foreign funds into emerging markets, including Indonesia.

Foreign investors sold a net of US$434.7 million worth of stock this week through Wednesday.

One-month non-deliverable contracts plunged 2.4 percent to 11,441 per dollar on Thursday afternoon, Bloomberg reported. That was 5.7 percent weaker than the onshore spot rate, which fell 0.5 percent to 10,825, the lowest level since April 2009.

Bank Central Asia sold the dollar on Thursday for Rp 11,450 and bought it for Rp 11,050, while Bank Mandiri sold it for Rp 11,325 and bought it for Rp 10,925.

Bank Indonesia'€™s Jakarta interbank spot dollar rate (JISDOR) quoted the rate higher at Rp 10,795 from Rp 10,723 on Wednesday.

The price fall also continued on the Indonesian Stock Exchange (IDX), as most Asian equity markets posted their longest losing streaks since November.

The Jakarta Composite Index (JCI) lost another 1 percent to close at 4,172. 09 at the end of trading, as foreign fund managers continued selling their stocks. The index has fallen about 20 percent since reaching a record high in June. The significant loss has already wiped out all the gains booked earlier in the year.

In addition to the US stimulus factor, falling share prices and the declining value of the rupiah were also caused by growing concerns about the worsening of the country'€™s economic condition, analysts said.

The surge in inflation, the widening of the country'€™s current account deficit, the continued drop in foreign exchange reserves and the fall in exports have all become big investor concerns.

Foreign exchange reserves, for example, dropped to $92.67 billion at the end of July, the lowest level since October 2010. The current account deficit also widened to $9.8 billion at the end of the second quarter, equal to 4.4 percent of the gross domestic product (GDP). Deficit to GDP ratio has already exceeded the maximum 3 percent level set by the government.

Despite the overall drop in the JCI, two business sectors '€” agriculture and mining '€” recorded significant jumps. The index for the agriculture sector rose 5.89 percent, the mining sector 7.09 percent.

'€œInvestors are looking at dollar earners, which are expected to benefit from the rise in the dollar against the rupiah,'€ Fajar Indra of Panin Sekuritas said.

Stocks in coal miners and crude palm oil producers, the main contributors to the country'€™s exports, reported big gains on Thursday. Shares in coal miner PT Adaro Energy rose 18.1 percent, PT Bukit Asam 17.6 percent and PT Indo Tambangraya Megah 9.1 percent. Meanwhile, shares in plantation company PT London Sumatra Plantation surged 20.6 percent.

Harry Su, the head of research with Bahana Securities, said the gains were because during a period of a weakening rupiah, investors looked for commodity based stocks.

'€œHowever, we have to be careful because [gains] will be offset by declining commodity prices,'€ Harry said.

The Asia-Pacific gauge lost almost all this year'€™s gains, lagging behind a 15 percent surge in the Standard & Poor'€™s 500 Index as growth slows in China and speculation that the Fed will curb stimulus spurs investors to sell assets across Asia and emerging markets.