(Bloomberg) -- Indonesia’s rupiah led gains among Asian currencies as the prospect of President Susilo Bambang Yudhoyono getting re-elected spurred overseas funds to buy the nation’s assets.

Singapore’s dollar and Malaysia’s ringgit rallied after the Monetary Authority of Singapore said it sees no reason for “any undue weakening” of the city-state’s currency. The rupiah climbed to a three-month high as foreigners bought $114 million more local stocks than they sold this month. Yudhoyono’s Democrat Party is leading the April 9 parliamentary polls, placing him in a better position to push forward policies and revive growth in Southeast Asia’s biggest economy.

“The people and the international community would like to see another five years of Yudhoyono,” said Frederick Weoseke, head of treasury at PT Bank Internasional Indonesia in Jakarta. “The market is very enthusiastic.”

The rupiah climbed 1.6 percent to 10,930 a dollar, the highest level since Jan. 19, as of 10:42 a.m. in Jakarta. Singapore’s dollar jumped 0.9 percent to S$1.5036 and the ringgit gained 0.9 percent to 3.5982.

The Indonesian Survey Institute said Yudhoyono’s party got 20.4 percent of the vote, according to partial returns so far, almost three times the tally in 2004’s election. Final results are due on May 9.

Seeking Re-election

Yudhoyono, who is seeking re-election in July, has seen through reforms that saw the economy expand more than 6 percent in each of the last two years, the fastest pace since the 1997- 1998 Asian financial crisis. He has enacted new laws to attract money from abroad, including tax breaks on investments. The economy may expand by 4 percent to 4.5 percent this year, Finance Minister Sri Mulyani Indrawati said yesterday.

Singapore’s dollar rose to a two-month high after the central bank today “re-centered” the trading band in which it manages the local currency and said it doesn’t plan to seek appreciation or depreciation. The decision was predicted by 15 of 17 economists surveyed by Bloomberg News last month.

The economy remains “sound” and the city-state’s financial system is “resilient,” the MAS said today. “There is therefore no reason for any undue weakening of the Singapore dollar.”

The economy may shrink as much as 9 percent this year, the most in its 44-year history, the trade ministry forecast today.

Trading Band

The MAS conducts its monetary policy by guiding the Singapore dollar within an undisclosed trade-weighted band of major trading partners’ currencies. It adopted a faster currency appreciation stance in October 2007, announced a one-off strengthening in April 2008 and halted gains altogether at the last policy meeting in October.

“Singapore dollar’s rebound after the news was due to the MAS remarks that there is no need for undue weakening of the currency,” said Wai Ho Leong, a regional economist at Barclays Capital in Singapore. “That statement tells us that the devaluation is a one-off event.”

The ringgit snapped a two-day loss, rallying the most in more than a week, after the decision by Malaysia’s biggest trading partner.

“The policy statement should ease any devaluation concerns as people are increasingly seeing the first-quarter as the trough,” said Yeah Kim Leng, chief economist in Kuala Lumpur at RAM Holdings Bhd., Malaysia’s nation’s biggest rating company. “The decision will have a bearing on the ringgit, given the close trade ties between the countries.”

Risk Appetite

Taiwan’s dollar and the South Korean won rose against the greenback as a global stocks rally damps risk aversion, bolstering demand for emerging-market assets.

The Asian Dollar Index, which tracks the 10 most-traded regional currencies outside of Japan, rose for a second day. The MSCI Asia Pacific index of regional shares excluding Japan climbed for a fourth day. The Standard & Poor’s 500 Index of U.S. stocks has rallied 27 percent since March 9.

“So far the risk appetite has been fairly good as judged by stock rallies,” said Thio Chin Loo, a senior currency analyst at BNP Paribas SA in Singapore. “The market is settling into looking for more signs that the worst has passed. They won’t be too quick to jump into a new wave of risk-taking.”

Taiwan’s currency gained 0.3 percent to NT$33.605, according to Taipei Forex Inc. It earlier touched NT$33.587 the strongest level since April 7. The won rose 0.1 percent to 1,327.60 in Seoul.

Elsewhere, the Philippine peso was little changed at 47.78. China’s yuan traded at 6.8295, compared with 6.8352 yesterday, while Vietnam’s dong was at 17,777 versus 17,765.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.