Rupiah Falls Most Since September on Month-End Dollar Demand

Indonesia’s rupiah fell by the most in a month and government bonds dropped on speculation companies are buying dollars to meet month-end payments.

The currency slipped 0.6 percent, the biggest drop since Sept. 27, to 11,174 per dollar as of 9:34 a.m. in Jakarta, prices from local banks show. In the offshore markets, one-month non-deliverable forwards fell 0.5 percent to 10,967, trading 1.9 percent stronger than the onshore spot rate, data compiled by Bloomberg show.

The government will report on Nov. 1 that the nation’s trade surplus narrowed to $46 million in September from $132 million in August, according to the median estimate in a Bloomberg survey. Overseas shipments fell for the 18th straight month, a separate survey showed before data due the same day.

“At the end of the month, you typically see increased dollar demand, so we will see that reflected until the end of this week,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “The trade data may show a small positive, but it won’t be too significant as exports are likely still weak.”

One-month implied volatility in the rupiah, a measure of expected moves in the exchange rate used to price options, lost nine basis points to 12.36 percent. A fixing used to settle the forwards was set at 10,825 per dollar yesterday, from 10,741 on Oct. 28, according to the Association of Banks in Singapore.

The yield on the 5.625 percent notes due May 2023 climbed seven basis points, or 0.07 percentage point, to 7.17 percent, 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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