Indonesia’s rupiah forwards strengthened for a fourth day, the longest run of gains in more than seven weeks, and dollar bonds advanced as voters went to the polls to choose a new president.

One - month non - deliverable forwards traded offshore rose 0.2 percent to 11,730 per dollar as of 12:04 p. m. in Singapore, according to data compiled by Bloomberg. The contracts have climbed 2.3 percent since July 3 amid speculation market favorite Joko Widodo will eke out a victory over Prabowo Subianto, who has narrowed the gap in opinion polls over the last few months.

Local financial markets are shut for the election today with polls closing at 1 p. m. in Jakarta. The Jakarta Composite(JCI) index of shares advanced 2.4 percent in the last two days and the rupiah rallied 2.1 percent after Widodo, known locally as Jokowi, widened his lead over Prabowo Subianto to 3.6 percentage points in a poll released by Lingkaran Survei Indonesia on July 7. That compared with a 0.5 percentage point advantage in a survey from the same company at the end of June.

“The market has positioned for a narrow victory for Jokowi, but a wider margin could mean a bigger rally, ” said Saktiandi Supaat, head of foreign - exchange research at Malayan Banking Bhd. in Singapore. “There may be some unhappiness if Prabowo wins, but as long as the response to the result is calm” major outflows are unlikely, he said.

Priced In

The rupiah will probably rally toward 11,300 per dollar should Jokowi win, while a Prabowo victory would see the currency decline toward 12,000, Supaat said. The rupiah closed at 11,630 yesterday. A Jokowi victory has been mostly priced into the market, according to a research note by Brown Brothers Harriman & Co. analysts including Marc Chandler in New York.

Jokowi told reporters after he voted in Jakarta that if there was significant vote - buying it could have an impact on the election result. Prabowo said he would “respect the decision of the people” after he cast his ballot.

A June 30 survey by Roy Morgan showed Jokowi, the non - active Jakarta governor, with a four percentage point lead, although the company described the race as “too close to call. ” If the result is close, Indonesians will have to wait until July 21 or 22 for official results to be announced, and possibly until late August if there are legal challenges.

“Certainly the market tells us they would prefer a Jokowi victory, ” Miles Remington, head of Indonesian equities at BNP Paribas SA in Jakarta, said in an interview with Bloomberg Television today. “If we get a victory for Prabowo, certainly the market is going to take it less favorably. Any sharp sell - off will be met by people looking for bargains. ”

Dollar Bonds

The yield on Indonesia’s 5.875 percent sovereign dollar bonds due 2024 fell two basis points to 4.31 percent, the lowest level since May 30, according to data compiled by Bloomberg. The yield has dropped 18 basis points this week.

Expectations that Jokowi would cut red tape and corruption helped send the benchmark index of shares into a bull market in March when he joined the race. Pledges by Prabowo, a former general and once son - in - law of the dictator Suharto, to borrow heavily and renegotiate contracts with foreign companies have alarmed some investors.

Jokowi has squandered a lead of more than 30 points with a disorganized campaign that raised Prabowo’s appeal as a strong leader and highlights the difficulties he will face in pushing through reforms.

Economy, Oil

The winner will inherit an economy that grew at the slowest pace since 2009 last quarter. Exports have fallen in four of the first five months of the year following a partial ban on the export of mineral ores that started in January, while costly fuel subsidies make government finances vulnerable to increases in global oil prices. The cost of crude in New York has climbed 5.2 percent this year amid concern fighting in Iraq would curb shipments from the nation.

One - month implied volatility in the rupiah, a measure of expected swings in the currency used to price options, climbed one basis point to 12.28 percent, data compiled by Bloomberg show. The gauge rose to 12.75 percent yesterday, the highest since Feb. 10.

Both candidates have campaigned on populist platforms to spur growth, reduce poverty, build infrastructure and help farmers. They have promised to keep the export ban in place and neither mentioned fuel subsidies in the final leaders’ debate over the weekend.

“This not an election about drastically different economic outcomes, ” John Kurtz, president director in Jakarta of consultancy A. T. Kearney Inc., said yesterday in an interview. “The notion that Prabowo is a hardline nationalist extremist is overdone, ” while there is a risk that if Jokowi wins he will struggle to push through reforms without a dominant parliamentary coalition, he said.