0 Rupiah Forwards Rise for Fourth Day Before December Trade Data

Indonesia’s rupiah forwards rose for a fourth day, the longest winning streak since November, after data showed the trade deficit narrowed for a second month. The shortfall in December was $155 million, down from $618 million in November and less than half the $400 million forecast by economists in a Bloomberg survey. Bank Indonesia stepped up intervention to increase dollar supply domestically and narrow the gap between onshore and offshore exchange rates, Hendar, executive director for monetary policy, said this week. 

Government bonds were little changed today following data showing a pickup in inflation. “As long as the trade balance continues on an improving trend, market sentiment will be better,” said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore. “Bank Indonesia has also shown stronger intent to provide more dollar liquidity onshore and guard the rupiah’s volatility.” The currency’s one-month non-deliverable forwards rose 0.2 percent to 9,784 per dollar as of 9:31 a.m. in Jakarta, according to data compiled by Bloomberg. 

That’s 0.2 percent weaker than the spot rate, which declined 0.3 percent to 9,765, prices from local banks show. A daily fixing used to settle the derivative contracts was set at 9,799 yesterday by the Association of Banks in Singapore. The onshore spot rate fell 1.1 percent this week, while the forwards strengthened 0.2 percent. The yield on the 5.625 percent sovereign debt due May 2023 was little changed today at 5.33 percent, the highest level since Dec. 11, according to prices from the Inter Dealer Market Association. It rose 13 basis points, or 0.13 percentage point, this week. Inflation accelerated to 4.6 percent in January from 4.3 percent the previous month, the government reported today. Economists predicted a 4.5 percent rate, a Bloomberg survey showed.

Bloomberg
source : the jakarta globe