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Rupiah Forwards Rise for Sixth Day After Growth Stays Above 6%

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Feb. 5 (Bloomberg) -- Indonesia’s rupiah forwards reversed earlier losses and climbed for a sixth day after a government report showed the economy expanded more than 6 percent for a ninth quarter. Bonds rose.

Gross domestic product increased 6.11 percent from a year earlier in the three months ended December, compared with a revised 6.16 percent in the previous period, according to data today from the Central Bureau of Statistics. Finance Minister Agus Martowardojo reiterated after the figures were issued that the economy will grow as much as 6.8 percent this year.

“Growth has remained stable at above 6 percent despite global turmoil, which gives greater confidence on the economy,” said Rully Nova, a currency analyst at PT Bank Himpunan Saudara 1906 in Jakarta. “Growth will certainly accelerate this year as exports improve.”

One-month non-deliverable forwards strengthened 0.1 percent to 9,665 per dollar as of 4:16 p.m. in Jakarta, data compiled by Bloomberg show. The contracts traded at a 0.2 percent premium to the spot rate, which declined 0.1 percent to 9,684, according to prices from local banks.

A daily fixing used to settle the derivatives was set at 9,695 today by the Association of Banks in Singapore. The forwards declined to 9,985 on Jan. 10 and Jan. 11, the weakest level since September 2009, before reaching a two-month high of 9,660 yesterday.

The rupiah’s one-month implied volatility, which measures expected exchange-rate swings used to price options, was steady at 6.5 percent for a second day.

The yield on Indonesia’s 5.625 percent government bonds due May 2023 dropped one basis point, or 0.01 percentage point, to 5.27 percent, prices from the Inter Dealer Market Association show.

The government sold 1.5 trillion rupiah ($155 million) of bonds in its first issue of Islamic securities of 2013, with investor bids exceeding the amount on offer by 2.8 times, the debt management office said in a statement on its website.

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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