Indonesia’s Rupiah Rises as Greece Optimism Cuts Dollar Demand
Indonesia’s rupiah rose the most in three weeks as the dollar extended losses after US retail sales missed estimates and on optimism Greece will stay in the euro.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, dropped for a third day after Greece and its creditors signaled a willingness to compromise before the expiry of the nation’s bailout at the end of the month. Indonesia reported an 8.9 percent year-on-year decline in January exports Monday, worse than the median estimate in a Bloomberg survey for a 4.6 percent drop. Imports fell 15.6 percent, resulting in a trade surplus of $709 million, the largest in almost a year.
The rupiah gained 0.4 percent to 12,738 a dollar as of 12:11 p.m. in Jakarta, according to prices from local banks. That’s the biggest advance since Jan. 21 and follows a 1.3 percent decline last week. One-month non-deliverable forwards traded offshore rose 0.2 percent to 12,835, according to data compiled by Bloomberg. Bank Indonesia set a fixing used to settle the contracts at 12,742, from 12,769 on Friday.
The rupiah’s advance “is a knee-jerk reaction to the data out of the US, which was pretty weak,” said Andy Ji, a Singapore-based strategist at Commonwealth Bank of Australia. “On Greece, the expectation is that they will reach some kind of resolution and that affects investor appetite. That’s a double whammy for the US dollar.”
Retail sales in the world’s largest economy fell 0.8 percent in January from the previous month, compared with the median estimate in a Bloomberg survey for a 0.4 percent drop, data showed Thursday. That was supportive of emerging-market assets as it weakens the case for the Federal Reserve to increase interest rates.
Indonesian government bonds were little changed. The yield on the September 2025 notes was steady at 7.49 percent, according to the Inter-Dealer Market Association.
Bloomberg
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