Feb. 13 (Bloomberg) -- Indonesia’s rupiah advanced on speculation policy makers were in the market to support the currency after an unexpected interest-rate cut last week contributed to a two-day slide.
The central bank lowered its reference rate by 25 basis points to 5.75 percent on Feb. 9, a move predicted by four of 15 economists surveyed by Bloomberg. Bank Indonesia has been intervening in the currency and bond markets to curb volatility, Governor Darmin Nasution said at a seminar in Jakarta Feb. 10. Greek lawmakers approved budget cuts, paving the way for euro- area finance ministers to consider a second aid package for the nation at a Feb. 15 meeting.
“Intervention by the central bank in the currency and bonds will continue,” said Radhika Rao, an economist at Forecast Pte in Singapore.
The rupiah appreciated 0.1 percent to 9,020 per dollar as of 3:15 p.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The currency fell as much as 0.2 percent earlier.
The exchange rate is relatively stable and won’t be much affected by the rate cut, Bank Indonesia Deputy Governor Halim Alamsyah said following the policy review.
The yield on the government’s 7 percent bonds due May 2022 fell three basis points, or 0.03 percentage point, to 5.12 percent today, according to midday prices by the Inter-Dealer Market Association.
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