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Rupiah rises in longest winning streak
Indonesiaâs rupiah strengthened for a fifth day, the longest rising streak in 10 months, on speculation some investors are buying local-currency debt to take advantage of recent declines
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ndonesia's rupiah strengthened for a fifth day, the longest rising streak in 10 months, on speculation some investors are buying local-currency debt to take advantage of recent declines.
Global funds have pulled Rp 22.9 trillion (US$1.8 billion) from rupiah sovereign notes this month through Dec. 19, Finance Ministry data showed. That helped push the 10-year yield to as high as 8.45 percent last week, more than double the level on similar-maturity Malaysian notes. The government will announce the magnitude of its planned fixed fuel subsidies 'soon' and will seek parliamentary approval next month, Sofyan Djalil, coordinating economic minister, said Monday.
'The market is repositioning as being short rupiah is painful considering the rates, especially near the year-end,' said Irene Cheung, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd. in Singapore. 'I'm in favor of the government taking advantage of low oil prices to do away with subsidies, so it won't keep coming back to haunt them.'
The rupiah advanced 0.4 percent to 12,439 per dollar, prices from local banks showed. It has gained 2.1 percent in five days through Monday, paring its monthly loss to 1.9 percent. Finance Minister Bambang Brodjonegoro said Dec. 19 that he saw a 'new equilibrium' for the rupiah at 12,000 to 12,500, Bloomberg reported. (***)
