* BI allows indicative prices to match dealt levels -traders
* Asia FX higher; baht jumps on stop-loss dlr selling
* Won at 6-mth high, intervention caution limits gains
* Taiwan dlr higher on foreign financial institutions
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Sept 12 (Reuters) - The Indonesian rupiah fell to
its weakest in nearly 4 1/2 years on Thursday, but traders said
the central bank allowed indicative prices to match dealt levels
-- improving dollar liquidity.
The rupiah fell as much as 1.6 percent to 11,520 per
dollar, its weakest since April 2009, on dollar demand from
local companies. Most emerging Asian currencies rose.
By letting the indicative price reflect the market price,
Bank Indonesia prompted investors to sell dollars, traders said.
The central bank was also spotted providing dollars around the
rupiah's low, they added.
Foreign banks sold the greenback, which is linked to inflows
to the country's stocks and bonds, traders said.
"Liquidity is coming back. The market is much better," said
a Jakarta-based trader, noting the rupiah had been recently
traded near 12,000 on sustained local corporate dollar demand.
Bank Indonesia often discouraged traders from posting
electronic trading platforms prices around dealt levels to curb
worries about the country's financial stabilities.
In July, the central bank had let indicative rupiah prices
on screen match traded levels but the authority prevented it
again as mounting worries about the country's current account
deficit and inflation kept dragging the rupiah weaker.
Indonesia, along with India, were seen more vulnerable than
other Asian countries to the looming reduction in the Federal
Reserve's quantitative easing because of their shortfalls in
Jakarta's top two officials said Indonesia is sharply
cutting inflation and starting to trim its ballooning current
account deficit, two top officials said, pointing to issues that
are testing confidence in Southeast Asia's biggest economy and
have sent its currency sliding.
Bank Indonesia took various measures to stabilise the worst-
performing emerging Asian currency of the year including a total
of 125 basis points hike in the benchmark reference rate.
The central bank is expected to keep the rate unchanged at
its policy meeting later in the day as signs of improvement may
help ease pressure on the rupiah, which has lost 16.3 percent
against the dollar so far this year.
Analysts and traders have said the authority needs to
improve dollar liquidity in the local currency market to support
The Thai baht rose as much as 1.1 percent to 31.62
per dollar, its strongest since Aug. 20 on stop-loss dollar
The greenback fell to two-week low against a basket of major
currencies on growing doubts the Fed will scale back its
bond-buying programme in any significant way next week.
The baht found more support from equity inflows and foreign
demand, traders said.
The South Korean won gained 0.5 percent to
1,081.5 to the greenback, its strongest since Feb. 28.
Foreign investors continued to buy Seoul shares,
while offshore funds bought the won, traders said.
But increasing caution over suspected intervention by the
foreign exchange authorities limited the won's upside, traders
"It looks better to buy the won on dips, but I don't expect
it to go to the 1,070 level," said a foreign bank trader in
"In addition to the authorities, there is other demand
around 1,080 on expectations that level would be kept."
The won shrugged off the central bank's decision to maintain
interest rates on hold for a fourth consecutive month, as widely
The Taiwan dollar advanced on demand from foreign
The island's currency found more support as China's central
bank fixed the yuan's mid-point at its highest since the
landmark revaluation in 2005.
Still, investors stayed wary of potential intervention by
Taiwan authorities, while foreign financial institutions'
inflows were smaller than recent days, traders said.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 99.52 99.88 +0.36
Sing dlr 1.2674 1.2655 -0.15
Taiwan dlr 29.676 29.828 +0.51
Korean won 1082.40 1086.50 +0.38
Baht 31.71 31.96 +0.79
Peso 43.78 43.79 +0.03
Rupiah 11500.00 11330.00 -1.48
Rupee 63.16 63.38 +0.35
Ringgit 3.2660 3.2635 -0.08
Yuan 6.1184 6.1185 +0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 99.52 86.79 -12.79
Sing dlr 1.2674 1.2219 -3.59
Taiwan dlr 29.676 29.136 -1.82
Korean won 1082.40 1070.60 -1.09
Baht 31.71 30.61 -3.47
Peso 43.78 41.05 -6.23
Rupiah 11500.00 9630.00 -16.26
Rupee 63.16 54.99 -12.94
Ringgit 3.2660 3.0580 -6.37
Yuan 6.1184 6.2303 +1.83
(Additional reporting by Miao-jung Lin in TAIPEI, KyoungHo Lee
in SEOUL and IFR Markets' Catherine Tan; Editing by Eric Meijer)