Indonesian 10-year government bonds dropped for a fourth day, pushing the yield to a 12-week high, as February inflation topped estimates. The rupiah fell.
Consumer prices rose 5.31 percent, compared with 4.57 percent in January, official data showed today. That was more than the 4.81 percent median estimate of 18 analysts surveyed by Bloomberg. A separate report today showed a trade shortfall of $171 million in January.
The yield on the government’s 5.625 percent bonds due May 2023 rose three basis points today and 10 basis points this week, to 5.38 percent as of 4:35 p.m. in Jakarta, prices from the Inter Dealer Market Association show. That was the biggest weekly advance since Jan. 11. The yield on sovereign two-year notes dropped eight basis points this week and five basis points today to 4.25 percent.
“Inflation was much higher than expected, so we may see the 10-year bond yields adjust to as high as 5.6 percent,” said Dini Anggraeni, a fixed-income analyst at PT Mandiri Sekuritas, a unit of the nation’s largest lender by assets. “There seems to be a shift from longer-term bonds to the shorter term as investors seek security.”
The rupiah fell 0.1 percent to 9,675 per dollar, the most since Feb. 21, prices from local banks compiled by Bloomberg show. It gained 0.4 percent this week. One-month implied volatility in the rupiah, which measures expected moves in the exchange rate used to price options, dropped five basis points, or 0.05 percentage point, to 5.8 percent.
One-month non-deliverable forwards declined 0.1 percent to 9,690, a 0.2 percent discount to the spot rate, data compiled by Bloomberg show. A daily fixing used to settle rupiah derivatives was set at 9,681 today, from 9,669 yesterday, by the Association of Banks in Singapore.
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