Indonesian rupiah is at levels not seen since 1998

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The swelling ranks of troubled emerging market currencies show no signs of abating. This time it's the Indonesian rupiah.

Indonesia's local currency Tuesday plunged to 14,280 against the U.S. dollar, its lowest level since July 1998 during the dismal days of the Asian financial crisis. The currency had closed at 14,245 against the dollar on Monday, according to Reuters data.

The rupiah has been under the cosh for a while as growth in Southeast Asia's largest economy slows and rising risk aversion dims the allure of the country's assets.

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Feeble economic activity, coupled with concerns that reforms are stalling, has also means that foreign investments haven't risen as rapidly as the government could have hoped.

Foreign direct investments into Indonesia currently stand at 2.1 percent of gross domestic product, lower than countries such as Malaysia and Thailand, where the ratio is more than 3 percent, according to Moody's Investors Service.

"In addition to supporting the growth rate and balance of payments, foreign direct investment can also bring benefits such as technology transfers and other productivity enhancements that would raise Indonesia's potential growth," the ratings agency said.

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Earlier rupiah weakness has forced the country's central bank to intervene. Indonesia's foreign exchange reserves fell to $105.35 billion at the end of August from $107.55 billion at the of July, according to Bank Indonesia figures reported by Reuters.

The reserves in August were equivalent to 7.1 months of imports, Reuters said.