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Rupiah Posts Biggest Jump in a Week
Khalid Qayum | September 08, 2010

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The rupiah posted its biggest gain in a week on Wednesday after foreigners pumped more funds into Indonesian stocks on Tuesday, seeking to profit from accelerating growth in Southeast Asia’s largest economy.

Overseas investors bought $166 million more Indonesian shares than they sold on Monday and Tuesday, having been net sellers of the securities in each of the last two weeks, and that helped drive the Jakarta Composite Index to a record high.

The rupiah pared its advance on speculation the central bank intervened to curb volatility.

Bank Indonesia is consistently “watching the market” to keep the currency at a comfortable level, said Muhammad Fauzi Halim, a foreign-exchange trader at Bank Resona Perdania in Jakarta. “Sentiment is positive for the rupiah” as stocks have been rallying.

The rupiah gained 0.3 percent to 8,993 per dollar as of 6 p.m. in Jakarta, the biggest gain since Sept. 1, according to data compiled by Bloomberg.

The currency has strengthened 4.4 percent this year, buoyed by foreigners’ net purchases of $1.8 billion of the nation’s equities.

The government’s benchmark 10-year bonds declined for a fourth straight day.

The yield on the 11 percent security due in November 2020 rose one basis point to 8.15 percent, according to prices provided by the Inter-Dealer Market Association.
 

Bloomberg