Foreign holdings of the nation's securities are poised to rise for a sixth month, the longest stretch since July 2011, with overseas investors adding 6.26 trillion rupiah ($644 million) to their local-currency portfolio this month through Feb. 20, finance ministry data show. The economy expanded at the slowest pace in two years in the fourth quarter and its current- account gap widened to the largest on record since Bloomberg began compiling the data in 1989.

"There is excessive optimism from foreign funds, so there is still chance a for yields to head lower," said Rully Nova, a currency analyst at PT Bank Himpunan Saudara 1906 in Jakarta. "The inflows may become a concern as they don't fully reflect the fundamentals, considering slower growth and the current- account deficit last quarter, and faster inflation ahead."

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