Rupiah Trades at Strongest in Almost Four Years on Fund Inflows
Indonesia’s rupiah traded at its strongest level in almost four years as overseas investors boosted holdings of the nation’s assets after inflation slowed for a second month in March. Bonds declined.
Funds based abroad bought $25.8 million more Indonesian equities than they sold yesterday and increased ownership of the country’s bonds to 212.36 trillion rupiah ($24.5 billion) as of April 4, from 200.4 trillion rupiah at the end of February, according to data from the stock exchange and finance ministry.
“Inflation has been well-managed and that’s supporting appetite for Indonesia’s stocks and bonds,” said Mika Martumpal, senior market analyst at PT Bank Commonwealth in Jakarta. “Bank Indonesia will probably keep interest rates steady this month, and continue to allow the currency to appreciate gradually.”
The rupiah was little changed at 8,664 per dollar as of 3:26 p.m. in Jakarta, according to data compiled by Bloomberg. The currency earlier touched 8,657, the strongest level since May 2007. It has gained 3.6 percent this year.
The economy may have expanded 6.6 percent in the three months through March, compared with an earlier forecast of 6.4 percent, Bank Indonesia Deputy Governor Hartadi Sarwono said on March 16. Consumer prices rose 6.65 percent last month from a year earlier, from an increase of 6.84 percent in February, according to official data released on April 1.
Policy makers next meet on April 12. They kept the benchmark rate unchanged at 6.75 percent last month, after a 25 basis-point increase in February.
Ten-year government bonds fell. The yield on the 8.25 percent note due July 2021 climbed three basis points to 7.86 percent, according to midday prices from the Inter-Dealer Market Association.
To contact the reporter on this story: Suryani Omar in Jakarta at somar6@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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