Indonesia's rupiah rose for the first time in five days against the dollar as falling crude prices boosted speculation that inflation will peak.

The currency gained the most in two weeks after global crude prices fell more than $3 per barrel yesterday and Bank Indonesia said it will tighten its policy stance to curb price pressures. The central bank has also said it will seek a stronger currency to reinforce its fight against inflation.

``The rupiah was stronger this morning following the lower oil prices last night,'' said Wiling Bolung, head of treasury at ANZ Bank Panin in Jakarta. ``The market is also wary of central bank intervention if the rupiah falls too much.''

The local currency traded at 9,126 per dollar at 9:10 a.m. in Jakarta, up 0.3 percent from 9,153 late yesterday, according to data compiled by Bloomberg. The currency is the third-best performer in the region this month, gaining 1.1 percent against the dollar.

Global crude prices fell $3 a barrel yesterday to a six- week low of $127.95 a barrel on forecasts a Gulf of Mexico hurricane will miss most of the U.S. Gulf oil fields.

Bank Indonesia is expected to ``tighten'' monetary policy to slow inflation from a 21-month high, Finance Minister Sri Mulyani Indrawati said yesterday. The central bank has raised its benchmark interest rate at three consecutive meetings to 8.75 percent.

It is also seeking to stabilize the rupiah to help slow inflation, Bank Indonesia Director Made Sukada said in a speech in Singapore yesterday