Bloomberg News

Rupiah Trades Near Two-Year Low, Bonds Decline on Greece Crisis

May 15, 2012

Indonesia’s rupiah traded near a two- year low and government bonds declined as the risk Greece will leave the euro bolstered demand for dollars.

Overseas investors sold $279 million more Indonesian stocks than they bought since the start of last week as Greek political leaders, divided over austerity measures required for a European Union-led bailout, failed to form a coalition government in the wake of a May 6 election. The Dollar Index (DXY), a gauge of the greenback’s strength, reached a four-month high before a two-day holiday begins in Indonesia tomorrow.

“It’s still Greece,” said Apressyanti Senthaury, an analyst in the treasury division at PT Bank Negara Indonesia. “External factors are driving the rupiah, especially the dollar’s position.”

The rupiah fell 0.4 percent this week to 9,280 per dollar as of 9:28 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. It touched 9,314 yesterday, the weakest level since May 2010, before strengthening 0.2 percent today.

One-month implied volatility, which measures exchange-rate swings used to price options, rose 150 basis points this week to 9 percent, the highest level since March 12. The measure gained 100 basis points, or one percentage point, today.

The yield on the government’s benchmark 10-year bonds climbed 24 basis points this week to 6.49 percent, the highest since November, data compiled by Bloomberg show. It rose six basis points today.

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

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


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