Rupiah Gains Most Since September, Stocks Rise on Trade Surplus

Indonesia’s rupiah and stocks rallied by the most since September after the country’s trade balance unexpectedly swung to a surplus. The government’s two-year bonds declined as inflation quickened.

The currency advanced 1.6 percent to 11,770 per dollar as of 4:28 p.m. in Jakarta, the biggest gain since Sept. 19, according to prices from local banks. It rose as much as 2.2 percent earlier to 11,705. In the offshore market, one-month non-deliverable forwards climbed 1.1 percent to 11,783, trading 0.1 percent weaker than the onshore spot rate, data compiled by Bloomberg show.

Exports exceeded imports by $42.4 million in October, compared with the median estimate for a $775 million deficit by economists surveyed by Bloomberg, official data showed today. Overseas sales climbed 2.6 percent, the first increase since March 2012, while international purchases fell 8.9 percent. Manufacturing growth in China, Indonesia’s largest overseas market, beat estimates in November, figures showed today.

“The data is a relief for the rupiah, although the rupiah at weaker than 11,000 is in line with the economy,” said David Sumual, Jakarta-based chief economist at PT Bank Central Asia, the nation’s largest lender by market value. “It’s hard to gauge a trend from just one data point, and I don’t think the trade surplus is sustainable yet.”

The rupiah slid 5.8 percent last month, the worst performance among 24 emerging-market currencies tracked by Bloomberg. The shortfall in the current account may widen to $30 billion to $31 billion this year, from $24 billion in 2012, Finance Minister Chatib Basri said last week.

Inflation Quickens

“The data should support expectations that the current-account deficit is improving as import growth slows,” Dian Ayu Yustina, a Jakarta-based economist at PT Bank Danamon Indonesia, said before the figures were released. “Better growth in China would help exports pick up as demand recovers.”

The Jakarta Composite index of shares climbed 1.5 percent to 4,321.977, the biggest increase since Sept. 19. Banking, property and consumer-related stocks led gains on optimism Bank Indonesia won’t raise borrowing costs this month, said Edwin Sebayang, an analyst at PT MNC Securities in Jakarta.

PT Bank Rakyat Indonesia, the nation’s second-largest lender, rose 3.4 percent, cement producer PT Semen Indonesia advanced 2.7 percent and PT Unilever Indonesia climbed 1.7 percent. The central bank’s board of governors will convene on Dec. 12 for the monthly monetary policy meeting.

Consumer prices gained 8.37 percent last month from a year earlier, compared with 8.32 percent in October, official data showed today. The median estimate of economists surveyed by Bloomberg was for an 8.45 percent increase.

Bonds, Volatility

The yield on the government’s 9.5 percent bonds due June 2015 rose two basis points to 7.82 percent, the highest level since Sept. 9, prices from the Inter Dealer Market Association show. The rate climbed 1.44 percentage points last month.

One-month implied volatility in the rupiah, a measure of expected moves in the exchange rate used to price options, advanced 15 basis points, or 0.15 percentage point, to 14.67 percent. A daily fixing used to settle the forward contracts was set at 11,721 per dollar today by the Association of Banks in Singapore, from 11,764 on Nov. 29.

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