Rupiah Advances Most in Ten Weeks Amid Global Recovery Optimism

Indonesia’s rupiah rose the most in ten weeks on speculation the nation recorded a trade surplus in October, and as U.S. data boosted optimism a global economic recovery is gaining momentum. Government bonds fell.

Overseas funds added 2.99 trillion rupiah ($311 million) to their holdings of the nation’s sovereign debt in the first three days of last week, finance ministry data show. U.S. consumers spent 13 percent more during the Thanksgiving weekend from a year earlier, the National Retail Federation said yesterday. Indonesia had a second consecutive trade surplus in September, following four months of deficits, official data show. The October figure is due Dec. 3.

“The market has turned risk-on again following positive data from the U.S.,” said Bayu Kurniawan, a foreign-exchange trader at PT Bank Ekonomi Raharja in Jakarta, a unit of HSBC Holdings Plc. “We expect the trade balance to be positive in October as global conditions steadily improve.”

The rupiah strengthened 0.6 percent to 9,600 per dollar as of 4:07 p.m. in Jakarta, the most since Sept. 14, prices from local banks compiled by Bloomberg show. One-month implied volatility, a measure of expected moves in exchange rates used to price options, dropped 10 basis points, or 0.1 percentage point, to a four-year low of 4.40 percent.

The yield on the government’s 7 percent bonds maturing in May 2022 climbed one basis point to 5.41 percent, closing prices from the Inter Dealer Market Association show.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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