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By Bloomberg

Indonesia’s government bonds completed the biggest weekly advance in a month as global funds bought the nation’s debt on signs the currency is stabilizing.

Overseas investors purchased 5.02 trillion rupiah ($384 million) of the notes in the past two weeks, taking total holdings to 499.5 trillion rupiah as of March 27, or 38.4 percent of tradable debt outstanding, Finance Ministry data show. The proportion should ideally be less than 30 percent, Bank Indonesia Governor Agus Martowardojo said Friday, adding that it wants to see more local participation in the bond market. A gauge of the rupiah’s swings declined to the lowest level since March 6 as the currency advanced for a second week.

“We saw some inflows return as the rupiah became more stable,” said I Made Adi Saputra, a fixed-income analyst at PT BNI Securities in Jakarta. “But we think many investors are still wary of further currency weakness, so that’s what they will closely watch going forward, in addition to inflation.”

The yield on the 2020 notes fell 10 basis points, or 0.10 percentage point, to 7.20 percent this week as of 4 p.m. in Jakarta, according to the Inter Dealer Market Association. That’s the biggest drop since Feb. 27. The yield rose two basis points Friday.

The central bank occasionally intervenes in the secondary bond market to ensure yields stay “healthy,” Martowardojo said March 25. Consumer prices probably rose 6.3 percent to 6.4 percent in March from a year earlier, Juda Agung, Bank Indonesia’s director of monetary policy, said the same day, before data due April 1.

The rupiah advanced 0.4 percent from March 20 to 13,066 a dollar, prices from local banks compiled by Bloomberg show. One- month non-deliverable forwards declined 0.3 percent this week to 13,184, data compiled by Bloomberg show.

One-month implied volatility for the rupiah, a measure of currency swings used to price options, dropped 27 basis points in the five days to 12.07 percent.