Sept. 25 (Bloomberg) -- The Indonesian rupiah fell from an eight-week high against the dollar after the International Monetary Fund warned of ``protracted'' economic instability due to credit-market turmoil.
The rupiah declined against all of the 17 most-traded Asian currencies on speculation investors will reduce holdings of the nation's bonds and stocks. Indonesia's currency has weakened 1.5 percent this quarter as concerns that U.S. subprime-mortgage losses will spread spurred a sell-off in emerging-market assets.
``People are stepping back slightly from risk today,'' said Sean Callow, senior currency strategist at Westpac Banking Corp. in Singapore. ``The rupiah and the ringgit are the classic risk currencies of this region. They're the ones that got hit early and hard by the rise in risk aversion.''
The rupiah dropped 0.4 percent to 9,167 versus the dollar as of 8:53 a.m. in Jakarta from 9,125 late yesterday, when it climbed to 9,118, the strongest since July 26, according to data compiled by Bloomberg. It may weaken to 9,200 over the next few days, Callow forecast.
Indonesia's currency trimmed the past week's gain to 0.6 percent as the IMF said in its Global Financial Stability Report yesterday that the turmoil in debt markets ``should not be underestimated'' and will likely slow global economic growth.
Malaysia's ringgit snapped a five-day rally, dropping 0.2 percent to 3.4337 per dollar.
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