Two-year bonds gained because Indonesia's current account deficit, which eased further in Q1-2014, causes speculation that Bank Indonesia will not raise borrowing costs again. In 2013, the central bank had raised its benchmark interest rate (BI rate) gradually from 5.75 percent in June 2013 to 7.50 percent in November 2013 in order to combat high inflation after the government increased prices of subsidized fuels in June 2013.

Indonesia's foreign exchange reserves, which rose to USD $105.6 billion at end-April 2014, also provided a positive market sentiment for the rupiah.

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.23 percent to IDR 11,536 against the US dollar on Monday (12/05).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia