Indonesian rupiah hits 17-year low after central bank inflation forecasts

[SINGAPORE] Indonesia's rupiah hit a near 17-year low on Friday after the central bank said inflation is expected to ease in February, improving chances for further interest rate cuts, after a surprise reduction earlier this month.

Bank Indonesia Governor Agus Martowardojo said Indonesia's annual inflation rate is expected to ease to below 6.5 per cent in February from 6.96 per cent in January.

The rupiah fell as much as 0.8 per cent to 12,935 per dollar, its weakest since August 1998. The rupiah has lost 4.3 per cent against the dollar so far this year, becoming the worst performing emerging Asian currency so far this year.

REUTERS