Rupiah Weakens, Bonds Little Changed Before Inflation Report

Indonesia’s rupiah dropped and government bonds were steady before official data forecast to show inflation accelerated for a second month.

Consumer prices rose 4.46 percent in April from a year earlier, the most since September, according to the median estimate of 17 economists surveyed by Bloomberg. The report is due around 11 a.m. in Jakarta.

“If inflation reaches above 4.5 percent then we may see the rupiah weaken beyond 9,200 per dollar,” said Dave Hartono, a Jakarta-based foreign-exchange trader at PT Bank ICBC Indonesia. “Otherwise, it will be in a very tight range of 9,170 to 9,200 for the week.”

The rupiah weakened 0.1 percent to 9,194 per dollar of 8:55 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. One-month implied volatility, which measures exchange-rate swings used to price options, held at 5.50 percent, the lowest level since August.

The yield on the government’s benchmark 10-year bonds was steady at 5.96 percent, according to data compiled by Bloomberg.

Indonesia is ready to start restricting sales of subsidized fuel this month, which the central bank predicts will boost consumer-price gains to 4.7 percent this year, Perry Warjiyo, director for economic and monetary-policy research at the central bank, said last week.

To contact the reporter on this story: Yudith Ho in Singapore at yho35@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.