Bloomberg News

Indonesian Rupiah, Bonds Climb Ahead of June Inflation Data

June 30, 2011

June 30 (Bloomberg) -- Indonesia’s rupiah had a second quarterly gain and bonds rose as overseas investors added to holdings of the nation’s assets as economists predicted inflation eased for a fifth month.

The government will report tomorrow that consumer prices rose 5.40 percent this month from a year earlier after having increased 5.98 percent in May, according to the median estimate of economists in a Bloomberg News survey. The currency pared its losses for the month to 0.5 percent after Greek lawmakers passed budget cuts needed for the nation to secure financial aid.

“We’re probably going to see weaker inflation tomorrow and that’s supporting sentiment in the market,” said Gundy Cahyadi, a Singapore-based economist at Oversea-Chinese Banking Corp. “The Greek austerity package that was passed also lifted risk appetite; there’s a relief rally in the market.”

The rupiah appreciated 1.4 percent this quarter to 8,584 per dollar as of 3:28 p.m. in Jakarta, according to data compiled by Bloomberg. The currency rose 0.5 percent from June 28. Financial markets in Indonesia were closed yesterday for a public holiday.

Overseas investors raised holdings of Indonesian government bonds by 4.5 percent this month through June 27 to 235.37 trillion rupiah ($27.4 billion), according to official data.

The government’s 10-year bonds rose. The yield on the 8.25 percent notes maturing in July 2021 fell two basis points, or 0.02 percentage point, to 7.55 percent from June 28, according to prices from the Inter-Dealer Market Association.

--Editors: Ven Ram, Simon Harvey

To contact the reporter on this story: Suryani Omar in Jakarta at somar6@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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