BLBG:Rupiah Falls On Month-End Dollar Demand, Share Sales; Bonds Gain
Indonesia’s rupiah fell for a fourth day on speculation importers are buying dollars to settle month- end bills and after global funds cut share holdings. Government bonds gained.
Overseas investors sold $98 million more local stocks than they purchased in the first three days of this week, exchange data show. The Jakarta Composite Index reached 4,108.67 last week, the highest level since May. The rupiah touched 9,526 against the dollar yesterday, the weakest level since June 25.
“The rupiah is pressured by month-end demand for dollars,” said Bayu Kurniawan, a Jakarta-based foreign-exchange trader at PT Bank Ekonomi Raharja, a unit of HSBC Holdings Plc. “Indonesia’s stocks may be seen as expensive after reaching beyond the 4,000 level and investors are likely to be cautious on earnings.”
The rupiah weakened 0.1 percent to 9,493 per dollar as of 3:51 p.m. in Jakarta, prices from local banks compiled by Bloomberg show. One-month implied volatility, which measures exchange-rate swings used to price options, held at 8 percent.
Global funds bought a net 2.24 trillion rupiah ($236 million) of local government bonds in the first three days of this week, finance ministry data show. Foreign holdings reached 235.9 trillion rupiah on July 24, the highest since Feb. 13.
The yield on the benchmark 7 percent notes due May 2022 dropped three basis points, or 0.03 percentage point, to 5.81 percent, according to prices from the Inter Dealer Market Association.
To contact the reporter on this story: Yudith Ho in Singapore at yho35@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
