Bloomberg News

Rupiah Snaps Two-Day Decline on Inflation Focus; Bonds Steady

April 17, 2012

Indonesia’s rupiah snapped two days of losses after the central bank said it will concentrate more on managing inflation than on spurring economic growth. Bonds were little changed.

Bank Indonesia is shifting its policy focus to consumer- price gains, Perry Warjiyo, director of economic research and monetary policy, said yesterday. The government raised $2.5 billion from sales of dollar-denominated securities, with investors bidding for 3.2 times the amount offered, the finance ministry said today.

“Bank Indonesia’s statement will have a positive effect on the rupiah as it reassures foreign investors,” Klara Pramesti, a Jakarta-based analyst in the treasury division at PT Bank Negara Indonesia. “The successful bond auction boosts the market’s appetite for riskier local assets.”

The rupiah traded at 9,177 per dollar as of 9:07 a.m. in Jakarta, compared with 9,180 yesterday, according to prices from local banks compiled by Bloomberg. The currency fell 0.4 percent this week. One-month implied volatility, which measures exchange-rate swings used to price options, held at 6.75 percent for a 10th day.

The yield on the government’s benchmark 10-year bonds was little changed at 6.07 percent, according to data compiled by Bloomberg. The yield reached a three-month high of 6.16 percent yesterday.

To contact the reporter on this story: Yudith Ho in Singapore at yho35@bloomberg.net.

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


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