Bloomberg News

Rupiah Forwards Gain to One-Week High on Faster China Growth

January 17, 2013

Indonesia’s rupiah forwards strengthened to a one-week high as economic growth accelerated in China, the nation’s biggest export market, brightening prospects for an end to falling overseas sales.

The world’s second-largest economy expanded 7.9 percent last quarter from a year earlier, up from 7.4 percent in the previous period, the government reported today. That was more than the 7.8 percent median estimate of analysts in a Bloomberg survey. Indonesia’s exports contracted for an eighth straight month in November, resulting in a second consecutive trade deficit, according to official data.

“Better economic growth in China adds to positive sentiment for Asian currencies including the rupiah,” said Fahrudin Haris Prastowo, a foreign-exchange trader at PT Bank Rakyat Indonesia in Jakarta. “Indonesia’s exports may begin to pick up as demand rises in the region.”

One-month non-deliverable forwards rose 0.2 percent to 9,875 per dollar as of 9:20 a.m. in Jakarta, the highest level since Jan. 10, data compiled by Bloomberg show. That’s 2.1 percent weaker than the spot rate, which fell 0.2 percent to 9,670, prices from local banks compiled by Bloomberg show.

A daily fixing used to settle the derivative contracts was set at 9,865 yesterday by the Association of Banks in Singapore. NDFs gained 0.4 percent this week, while the spot rate dropped 0.4 percent.

The currency’s one-month implied volatility, a measure of expected moves in the exchange rate used to price options, was unchanged at 6.75 percent, a level last reached in September.

The yield on the government’s 5.625 percent bonds due May 2023 held at 5.26 percent, the least since Jan. 11, according to prices from the Inter Dealer Market Association.

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

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net


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