Bloomberg News

Rupiah Snaps Four-Day Drop as Foreigners Buy Assets; Bonds Gain

November 04, 2011

Nov. 4 (Bloomberg) -- Indonesia’s rupiah and bonds gained after foreign investors pumped funds into the nation’s assets ahead of data predicted to show economic growth in Southeast Asia’s biggest economy accelerated last quarter.

Gross domestic product climbed 6.60 percent from a year earlier, compared with 6.49 percent in the second quarter, according to the median estimate in a Bloomberg survey before data due Nov. 7. The currency snapped a four-day drop as the MSCI Asia-Pacific Index of shares gained after Greece scrapped a referendum on a rescue package agreed on last week with euro- region leaders. Overseas investors bought $86 million more Indonesian shares than they sold yesterday, according to exchange data.

“Investors are rushing in for more assets because they consider the Indonesian market to be fundamentally strong,” said Wiwig Santoso, head of treasury and markets at PT Bank DBS Indonesia in Jakarta.

The rupiah gained 0.2 percent today to 8,955 per dollar as of 3:30 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. It declined 1.8 percent for the week and touched 9,000 yesterday, the weakest level since Oct. 3.

Foreign ownership of government debt rose 1.3 percent to 222.63 trillion rupiah ($24.9 billion) in the first three days of this week, according to finance ministry data.

Indonesia’s economy may have grown more than 6.6 percent in the third quarter, and inflation this year may be around 4 percent, Governor Darmin Nasution told reporters in Jakarta today.

The yield on the government’s benchmark 8.25 percent bonds due July 2021 dropped 12 basis points, or 0.12 percentage point, to 6.22 percent today, according to the midday prices by Inter- Dealer Market Association. The rate slipped 15 basis points for the week.

--Editors: Greg Ahlstrand

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#<120225.2794810.2.1.95.14779.25># -0- Nov/04/2011 09:14 GMT

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 NI ASIA NI ASIAX NI BON NI EM NI FRX NI INDO NI MARKETS NI SEASIA NI GBN NI AXB NI ASB NI FX NI CLM


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