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Bank Indonesia buys local bonds

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by November 30, 2016 General

SINGAPORE: Indonesia’s central bank bought 6.5 trillion rupiah in Indonesian government bonds in the secondary market to temper market volatility after the US presidential election, its deputy governor said.

Bank Indonesia (BI) bought a portion of the Indonesian government bonds that foreign investors sold in the wake of the US presidential election on Nov 8, deputy governor Perry Warjiyo said in an interview with Thomson Reuters.

“We bought about 6.5 trillion rupiah,” he said, adding that foreign investor outflows from Indonesia’s government bond market amounted to about 24 trillion rupiah over that span.

Investors are aware that BI interventions occured when “volatility in the market is too excessive,” said Warjiyo, who was speaking at the sidelines of an emerging Asia economic event in Singapore.

Indonesian government bonds and the rupiah, along with other emerging market assets, have come under selling pressure over the past few weeks, as US bond yields jumped after Donald Trump’s upset win in this month’s election.

Expectations President-elect Trump’s policies will boost fiscal spending, economic growth and inflation have triggered a sharp rise in US bond yields and the dollar. — Reuters

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