Bloomberg News

Rupiah Forwards in Longest Winning Streak Since July After GDP

February 05, 2013

Indonesia’s rupiah forwards gained for a seventh day, the longest winning streak since July, after data showed economic growth exceeded 6 percent for a third year, bolstering demand for local assets.

Gross domestic product increased 6.23 percent last year, compared with 6.49 percent in 2011, the government reported yesterday, with Finance Minister Agus Martowardojo predicting expansion of as much as 6.8 percent this year. Global funds added 2.41 trillion rupiah ($248 million) to their local- currency sovereign debt holdings last week, the most in almost two months, government data show.

One-month non-deliverable forwards strengthened 0.1 percent to 9,670 per dollar as of 8:50 a.m. in Jakarta, data compiled by Bloomberg show. They have rebounded from a three-year low of 9,985 reached on Jan. 10 and Jan. 11. The contracts traded at a 0.1 percent premium to the spot rate, which fell 0.1 percent to 9,682, according to prices from local banks.

“Steady growth and a stable economy lends positive sentiment for Indonesian notes,” said Nurul Eti Nurbaeti, the head of treasury research at PT Bank Negara Indonesia in Jakarta. “The rupiah has found support near this level even as Bank Indonesia reduces intervention, though it still closely monitors the market.”

A daily fixing used to settle the derivatives was set at 9,695 yesterday by the Association of Banks in Singapore. Today’s rate will be set at 11:30 a.m. in the city-state.

The rupiah’s one-month implied volatility, which measures expected exchange-rate swings used to price options, was little changed at 6.5 percent for a third day.

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

The government raised 1.5 trillion rupiah from its first sale of Islamic notes in 2013 yesterday, with investor bids exceeding the amount offered by 2.8 times, the debt management office said in a statement on its website.

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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