09/06/2026

BIZ & FINANCE TUESDAY | JUNE 9, 2026

17

Indonesia’s forex reserves slide to two-year low

Rupee extends losses after weak open MUMBAI: The Indian rupee deepened its opening losses yesterday, pressured by rising oil prices, fragile risk appetite and patchy corporate flows, which outweighed speculative dollar-selling interest. The rupee opened on a weaker footing at 95.32 per dollar versus the previous close of 94.9450. While speculators, who take bets on which way the currency will move, stepped in to sell dollars, indirectly supporting the rupee, overall corporate flows weighed on the currency, a currency dealer at a private sector bank said. The Reserve Bank of India’s measures on Friday appear to have altered interbank behaviour with its preference for selling rallies on the dollar/rupee pair instead of buying dips, he added. The RBI on Friday rolled out steps to support the rupee and attract dollar inflows after weeks of pressure linked to the Iran conflict, with potential flows seen in the range of US$30 billion to US$50 billion. Rising oil prices and growing expectations of a Federal Reserve rate hike have partly offset the positive sentiment around the rupee following the RBI’s measures. Oil prices jumped after Israel carried out renewed strikes on Lebanon despite a truce, undermining hopes for a broader de-escalation and the resumption of shipping through the Strait of Hormuz. The escalation adds to obstacles facing a US-Iran deal, with Tehran linking any pact to a Lebanon ceasefire. Oil is once again the biggest risk for the rupee, Amit Pabari, managing director at FX advisory company CR Forex, said. The rupee was further undermined after US Treasury yields jumped, following robust jobs data that cemented expectations that the Fed may raise interest rates later this year. – Reuters Tencent hires banks for dollar, offshore yuan bond sale SHANGHAI: Tencent Holdings has hired banks for a benchmark US dollar and offshore yuan bond sale, term sheets showed on yesterday, in what would be the Chinese technology company’s first dollar bond offering since 2021. A deal could follow as early as today, subject to market conditions, the term sheets showed. The term sheets did not give a size for the deal, but two sources said Tencent aims to raise about US$4 billion across both currencies. Tencent is looking to sell 10- and 20 year dollar notes, alongside 10- and 30 year offshore yuan notes. Offshore yuan, also known as CNH, refers to yuan that is traded outside mainland China. The notes are expected to be rated A1 by Moody’s, A+ by S&P and A by Fitch, the term sheets showed. Tencent last tapped the dollar bond market in April 2021, when it raised US$4.15 billion. The planned notes would be issued under Tencent’s previously announced US$30 billion global medium-term note programme, according to a Hong Kong exchange filing. The filing said the company intends to use the net proceeds from each issue of notes, including the proposed notes, for general corporate purposes. JPMorgan, HSBC and Morgan Stanley are the joint global coordinators for the proposed dollar notes, while Bank of China, CITIC Securities, HSBC, ICBC Asia and JPMorgan are joint global coordinators for the offshore yuan notes. – Reuters

o Observers warn big chunk of US$144.9b comprise bank deposits, raising rollover risk

interventions, but the central bank must pay banks back when its instruments mature, which is a rollover risk, one of the sources said. “If there are no more capital inflows or if the trade balance worsens, then the risk is more elevated,” the source said. Over the weekend, BI Governor Perry Warjiyo and Finance Minister Purbaya Yudhi Sadewa agreed to boost asset yields to attract foreign capital inflows to support the rupiah. The yield for Indonesia’s 10-year government bonds jumped to 7.142% yesterday from Friday’s closing of 6.902%. BI last month raised interest rates by an outsized 50 basis points. Its next policy meeting is scheduled for June 17-18. – Reuters

However, those discounts have largely disappeared since the conflict disrupted global supplies and increased competition for Russian barrels. PetroChina, which has not publicly confirmed plans for the restart of the Dalian unit, did not respond to a request for comment. The delays come as the Iran conflict has crunched refiners’ margins, with the Middle East oil supply disruption driving up crude prices, while they face state fuel price caps. At the same time fuel demand has weakened due to electric vehicle growth. As a result, throughput at China’s refineries fell to about 13.3 million bpd in April, the lowest said the net FX reserves are worryingly low given that a big chunk of the US$144.9 billion was in the form of commercial bank deposits with the central bank. A large part of BI’s reserves consists of US dollars placed by banks in its monetary operation instruments, such as FX term deposits and US dollar-denominated BI bonds, two market observers who are monitoring the situation closely told Reuters. Such placements have reached between US$30 billion to US$50 billion, they estimated, speaking on condition of anonymity to avoid any repercussions for speaking out. BI’s spokesperson Ramdan Denny Prakoso did not respond to request for comment. BI could still use all of its gross FX reserves on currency market

JAKARTA: forex reserves dropped by US$1.3 billion in May to US$144.9 billion, their lowest in nearly two years, following its interventions in the currency market, Bank Indonesia (BI) said yesterday, raising market concerns as pressures on the rupiah mount. The currency fell yesterday to a new historic low of 18,170 a dollar, and has been under pressure as a result of a wide range of investor worries, including President Prabowo Subianto’s big spending plans, a ballooning fuel subsidy budget following the Iran war, doubts about the central bank’s autonomy and new commodity export policies. Indonesia’s

In the year to May, Indonesia’s reserves have fallen by US$11.6 billion as the central bank stepped up currency intervention to defend the rupiah, which has fallen to fresh record lows almost every day since late March despite the government’s US$3.5 billion sale of US dollar- and euro-denominated bonds last month. BI said the reserve level at the end of May was equivalent to 5.6 months’ worth of imports, above the international standard of three months and “adequate to support external resilience and maintain macroeconomic and financial system stability”. However, some market players

China refiners delay projects with oil supply disrupted SINGAPORE: Chinese refiners have delayed two projects slated to come online this year following disruptions to Middle Eastern oil supplies from the Strait of Hormuz due to the Iran war, people familiar with the matter said. with the matter said. Consultancy Energy Aspects has said it expects the refinery to start in the latter part of the third quarter because of feedstock supply uncertainty linked to the Hormuz disruption. the state oil firm planned to restart the plant around mid-year to capitalise on strong margins from processing discounted Russian crude. since August 2022, government data showed. That equates to about 69% of capacity, based on state refiners’ estimates of total capacity at around 960 million metric tons a year, or about 19.2 million bpd.

Asia accounts for the bulk of new refinery capacity set to come online this year, according to analysts. In India, state-owned Hindustan Petroleum Corp (HPCL) and Indian Oil Corp are expected to add about 526,000 bpd refining capacity this year. Start-up of HPCL’s 180,000 bpd Barmer project was delayed a few months due to a fire, and the company has said it expects to commence operations there at 60% capacity starting this month. Indian Oil Corp said in May that expansions at its Barauni, Gujarat and Panipat refineries will be completed in August, November and December respectively. – Reuters

HAPCO did not immediately respond to a request for comment. Aramco declined to comment on questions about HAPCO’s start-up timeline. Aramco said in 2023 it would supply up to 210,000 bpd of crude to HAPCO. The project includes a 1.65 million metric tons-per-year (tpy) ethylene cracker and a 2 million tpy paraxylene unit. Separately, the planned restart of a 200,000 bpd crude unit at PetroChina’s Dalian refinery has been postponed indefinitely, according to three sources familiar with the project. Reuters reported in January that

The delays, which affect a combined capacity of 500,000 barrels per day, could cap fresh Chinese oil demand as well as global crude prices as refiners in the world’s top crude importer already face headwinds from flagging fuel consumption. Huajin Aramco Petrochemical Co (HAPCO), a joint venture between Saudi Aramco and Chinese state-owned defense conglomerate Norinco Group and Panjin Xincheng Industrial Group, has pushed back the startup of its 300,000 bpd refinery in the northeastern city of Panjin to September or early October from May or June, five people familiar

Drone view of oil tanker HELGA berthed at one of Iraq’s southern offshore oil terminals near Basra as it prepares to load crude oil. – REUTERSPIC