Bloomberg News

Rupiah Has Biggest Weekly Gain Since February on Stocks Buying

October 28, 2011

Oct. 28 (Bloomberg) -- Indonesia’s rupiah had its biggest weekly gain since February as foreign funds boosted holdings of the nation’s assets on faster U.S. growth and progress on solving Europe’s debt crisis.

Overseas investors bought $160 million more Indonesian shares than they sold in the first four days of this week, exchange data show. The benchmark stock index gained 5.6 percent this week as European leaders agreed to expand the region’s rescue fund to $1.4 trillion and write down Greek debt by 50 percent. The world’s largest economy grew at a 2.5 percent annual pace in the third quarter, the fastest in a year, figures showed yesterday.

“The sentiment has been positive after the meeting in Europe,” said Wiwig Santoso, head of treasury and markets at PT Bank DBS Indonesia in Jakarta. “Inflows show the confidence level about Indonesia’s economic performance.”

The rupiah appreciated 0.8 percent this week to 8,794 per dollar as of 4 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. That was the strongest level since Sept. 30. The currency strengthened 0.8 percent today.

Foreign ownership of the nation’s sovereign debt increased to 219.4 trillion rupiah ($24.9 billion) in the first four days of this week, from 219.3 trillion at the end of last week, according to data from the finance ministry’s website.

The yield on Indonesia government’s 8.25 percent bonds due July 2021 rose one basis point, or 0.01 percentage point, this week to 6.36 percent today, according to the Inter-Dealer Market Association. The rate fell four basis points today.

--Editors: Greg Ahlstrand

To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

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


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