Oct. 10 (Bloomberg) -- Indonesia’s rupiah was little changed, after sliding in each of the last five weeks, amid speculation the central bank was supporting the currency. Government bonds rose.
The currency earlier dropped as much as 1 percent as exchange data showed foreign funds sold $120 million more local stocks than they bought last week. Bank Indonesia will leave its benchmark interest rate unchanged at 6.75 percent for an eighth month at a policy meeting tomorrow, according to all 15 analysts in a Bloomberg survey.
“BI will keep the rate steady because rupiah volatility is still too high to let interest rates go lower,” said Mika Martumpal, a currency analyst at PT Bank Commonwealth in Jakarta. “The volatility in global markets is still the main driver behind the rupiah’s movement against the dollar. The central bank is always watching the market.”
The rupiah traded at 8,903 per dollar at 4:36 p.m. in Jakarta, having ended last week at 8,900, according to prices from local banks compiled by Bloomberg. The currency fell 3.4 percent in the past month and reached 9,115 on Sept. 26, the weakest level since June 2010.
The yield on Indonesia’s 8.25 percent bond due July 2021 fell 15 basis points, or 0.15 percentage point, to 6.72 percent, the lowest level in a month, according to closing prices from the Inter Dealer Market Association.
Policy makers will purchase government bonds and remain in the currency market to stabilize the rupiah, Hendar, Bank Indonesia’s director of monetary policy who uses only one name, said on Oct. 3. Foreign-exchange reserves dropped $10.1 billion last month from a record $124.6 billion at the end of August, official data showed last week.
--Editors: Anil Varma, James Regan
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