Rupiah Advances Most in a Week as Inflation Slower Than Forecast

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The rupiah strengthened the most in a week after inflation came in below estimates and a manufacturing gauge in China, Indonesia’s biggest export market, rose.

Consumer prices increased 0.17 percent in March from the previous month, compared with the 0.22 percent median estimate in a Bloomberg survey, figures showed Wednesday. Central bank Governor Agus Martowardojo said last week that monthly inflation would be 0.27 percent to 0.3 percent. China’s official Purchasing Managers’ Index was 50.1 last month, from 49.9 in February. Numbers above 50 signal expansion.

“There’s positive sentiment from China’s data as that bodes well for Indonesia’s trade numbers,” said Nurul Eti Nurbaeti, head of treasury research at PT Bank Negara Indonesia in Jakarta. “The central bank signaled that inflation will rise, but it rose less than expected, so that’s also positive for markets.”

The rupiah gained 0.3 percent, the most since March 24, to close at 13,042 a dollar, prices from local banks compiled by Bloomberg show. That pared the currency’s decline this year to 5 percent, the worst in Asia after Malaysia’s ringgit. In the offshore market, one-month non-deliverable forwards strengthened 0.5 percent to 13,145, according to data compiled by Bloomberg.

Government bonds rose, pushing the yield on the notes due March 2024 down four basis points, or 0.04 percentage point, to 7.40 percent, according to the Inter Dealer Market Association. That’s the biggest drop since March 24.

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