Indonesia’s rupiah gained, reversing an earlier loss, and government bonds advanced after global funds purchased the nation’s assets.
Offshore investors added Rp 5.63 trillion ($598 million) to their sovereign debt holdings last week, the biggest inflow since the five days ended Jan. 27, finance ministry data show. The Jakarta Composite Index gained for a second day. Bank Indonesia will keep its benchmark interest rate unchanged at 5.75 percent tomorrow, according to all 20 analysts in a Bloomberg survey.
“Looking at fund inflows data, there is room for the rupiah to strengthen beyond 9,400 and up to 9,350,” said Wiling Bolung, the head of treasury at ANZ Panin Bank in Jakarta. “We saw foreign investors buying Indonesia’s bonds and the stock market was positive today.”
The rupiah strengthened 0.1 percent to 9,420 per dollar as of 5:10 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency reached 9,480 earlier, the weakest level in July. One-month implied volatility, which measures exchange-rate swings used to price options, held at 8.25 percent.
The yield on the Indonesian government’s 7 percent bonds due May 2022 declined two basis points, or 0.02 percentage points, to 6.10 percent, according to closing prices from the Inter Dealer Market Association.