SINGAPORE: The Indonesian rupiah rose to its highest level in two months on Wednesday after Joko "Jokowi" Widodo was declared the winner of the presidential election, although its gains were tempered by suspected intervention.
The rupiah rose more than 0.9 percent at one point and touched a high of around 11,485 versus the dollar , its strongest since late May, according to Thomson Reuters data.
As the currency rallied, a spokesman for Indonesia's central bank said it will intervene in the foreign exchange market to stabilise the rupiah.
Traders said the central bank was detected intervening to buy the dollar versus the rupiah, helping to limit the currency's gains.
The rupiah last stood at 11,510 to the dollar, still up around 0.7 percent on the day.
The election result could spur an extended relief rally and eventually buoy the rupiah to levels around 11,300 or 11,400, said Mirza Baig, head of foreign exchange and interest rate strategy Asia for BNP Paribas in Singapore.
"But I would expect that the Bank Indonesia appetite for dollars will be there. Bank Indonesia likely wants to rebuild its FX reserves," Baig said, adding that the rupiah may return to a range of 11,500 to 11,800 in a few months.
Indonesia's Elections Commission, known as KPU, said on Tuesday that Jokowi had won the July 9 presidential election over his rival, former general Prabowo Subianto.
The head of Prabowo's legal team said on Wednesday that Prabowo plans to challenge the result in the Constitutional Court. The challenge had been widely expected, but many analysts believe it would be near impossible for Prabowo to overturn the result of the election.
"Jokowi's margin of over 8 million votes should serve as a substantial buffer in any court dispute," Wellian Wiranto, an economist for OCBC Bank, said in a research note.
Other Asian currencies also mostly pushed higher, including the Malaysian ringgit and the Philippine peso .
Investor interest in relatively high-yielding assets has been seen as a source of support for emerging Asian currencies recently, despite lingering worries about geopolitical tensions.
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