Sept. 29 (Bloomberg) -- The rupiah rose for a third day, erasing an earlier loss, on speculation the central bank intervened in the currency and after Indonesian stocks gained. Bonds advanced for a fourth day.
Bank Indonesia will buy bonds and intervene in the currency market “until the market cools,” Governor Darmin Nasution said last week. The yield on the Indonesian government’s benchmark 8.25 percent securities due July 2021 fell eight basis points, or 0.08 percentage point, to 7.06 percent today, according to prices from the Inter-Dealer Market Association. The rate has dropped 46 basis points this week so far.
“We saw intervention from the central bank to stabilize the market,” said Wiling Bolung, head of treasury at ANZ Panin Bank in Jakarta. Indonesia’s “stock market is positive today, that also supported the rupiah. Bank Indonesia comes into the market when it feels it is necessary.”
The rupiah appreciated 0.4 percent to 8,856 per dollar as of 4:20 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency has declined 3.6 percent this month and is heading for its biggest monthly decline since Feb. 2009. It has dropped 3.2 percent this quarter so far.
The currency slid as much as 1 percent earlier today on concern global investors are reducing holdings of the nation’s stocks and bonds as a global slowdown saps demand for riskier assets.
Foreign funds sold $644 million more Indonesian shares than they bought in September through yesterday, exchange data show. Overseas holdings of sovereign bonds dropped 9.9 percent this month to 222.8 trillion rupiah ($25.2 billion) as of Sept. 26, according to debt management office data.
--Editors: Greg Ahlstrand
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