Rupiah, Bonds Fall on Speculation Maturing Debt to Spur Outflows

Indonesia’s rupiah fell for a fourth day and bonds dropped on speculation global investors will repatriate funds as government notes mature this week.

The zero-coupon government bills worth 15 trillion rupiah ($1.6 billion) will fall due on March 8. Global funds reduced their holdings of sovereign debt by 5.7 trillion rupiah last week, the biggest weekly outflow since September, according to finance ministry data.

“We expect the rupiah to weaken because of the sovereign bond maturing soon,” said Yura Pradipta, a Jakarta-based foreign-exchange trader at PT Bank Internasional Indonesia. “Offshore funds may step out of the Indonesian market first. It usually takes them one or two days to re-enter as they take advantage of a weaker rupiah.”

The rupiah lost 0.1 percent to 9,153 per dollar as of 3:43 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency touched 9,200 per dollar earlier, the weakest level since Feb. 27.

The yield on the government’s 7 percent bonds due May 2022 climbed nine basis points, or 0.09 percentage point, to 5.67 percent, according to midday prices from the Inter Dealer Market Association. That was the highest yield in a week.

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