Indonesian Bonds Decline After Inflation Report; Rupiah Steady

Indonesia’s government bonds dropped and the rupiah was steady after official data showed inflation accelerated for a second month.

Consumer prices increased 4.50 percent in April from a year earlier, the most since September, the Central Bureau of Statistics said in Jakarta today. The median estimate of 17 analysts surveyed by Bloomberg was for a rise of 4.46 percent. The benchmark stock index rose for a second day.

“We may see downward pressure on bonds,” said Klara Pramesti, an analyst in the treasury division at PT Bank Negara Indonesia in Jakarta. “The inflation number will increase investor appetite for better returns in stocks.”

The yield on the government’s 7 percent bonds due May 2022 increased four basis points, or 0.04 percentage point, to 6 percent as of 4:08 p.m. in Jakarta, according to final prices from the Inter Dealer Market Association.

The rupiah was little changed at 9,191 per dollar, 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.

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.

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