Bloomberg News

Rupiah Forwards Snap Five-Day Gain; Bonds Steady Before GDP Data

February 04, 2013

Indonesia’s rupiah forwards dropped, snapping a five-day advance, as some investors judged recent gains excessive.

Agreements to buy the currency in 30 days reached a two- month high of 9,660 per dollar yesterday, 0.1 percent more expensive than the spot price, which closed at 9,671, prices from local banks show. The rupiah’s implied volatility, which measures expected exchange-rate swings used to price options, was steady at 6.5 percent for a second day. Government bonds were little changed before a report today that may show economic growth exceeded 6 percent for a ninth quarter.

“This is an expected brief correction after the forwards rose considerably,” said Suriyanto Chang, head of treasury at PT Bank QNB Kesawan in Jakarta. “The rupiah has stabilized and it will start to show a strengthening trend. We expect it to slowly head toward 9,500, possibly in this quarter.”

One-month non-deliverable forwards weakened 0.2 percent to 9,700 per dollar as of 8:54 a.m. in Jakarta, data compiled by Bloomberg show. The spot rate declined 0.3 percent to 9,699, according to prices from local banks.

A daily fixing used to settle the derivative contracts was set at 9,679 yesterday by the Association of Banks in Singapore. Today’s rate will be published at 11:30 a.m. in the city-state.

The yield on Indonesia’s 5.625 percent bonds due May 2023 was little changed at 5.27 percent, prices from the Inter Dealer Market Association show.

The economy expanded 6.2 percent in the fourth quarter, from 6.17 percent in the previous period, according to the median estimate of 20 analysts surveyed by Bloomberg before data due at 11:00 a.m. in Jakarta.

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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