Foreign Funds Add to Indonesia Sovereign Bond Holdings

Overseas investors have added to their holdings of rupiah sovereign bonds for the fourth week in a row.

Foreign funds bought a net 1.42 trillion rupiah ($108 million) of Indonesian government notes on Thursday and 1.19 trillion rupiah on Friday, according to the latest available data from the Indonesian Finance Ministry. That took weekly inflows to 1.06 trillion rupiah.

Indonesian sovereign debt has returned 8.7 percent this year, the most in Asia, as the central bank cut its benchmark rate three times and inflation stayed within its 3 percent to 5 percent target range. An 11 percent advance in the rupiah over the past six months has also improved the allure of the nation’s local-currency securities.

Indonesian 10-year notes rose for a fourth day as of 3:12 p.m. in Jakarta, pushing the yield down one basis points to 7.59 percent, according to the Inter Dealer Market Association. The two-year yield rose six basis points to 7.52 percent, while the rupiah weakened 0.1 percent to 13,175 a dollar.

(Corrects Finance Ministry figures for Thursday in second paragrah from 9.63 trillion rupiah outflow to 1.42 trillion rupiah inflow.)
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