BI & Gov't Sign Off On Another Burden-Sharing Deal

Spot USD/IDR has added 19 figs thus far and last trades at IDR14,412, with bulls setting their sights at IDR14,473, which limited gains on Aug 20. The next layer of resistance above is provided by Jul 26 high of IDR14,510. Meanwhile, a retreat under yesterday's low of IDR14,384 would shift focus to Aug 16/18 lows of IDR14,373.

• USD/IDR 1-month NDF last seen +10 figs at IDR14,459. Topside focus falls on Aug 19 high of IDR14,573, while bears look for a dip through yesterday's low of IDR14,418, towards Aug 12 low of IDR14,383.
• Tuesday brought a confirmation that Bank Indonesia and the Finance Ministry have struck a deal on their third burden-sharing scheme. The central bank will buy IDR215tn of INDOGBs this year and IDR224tn of debt in 2022 via private placements, charging a coupon rate equivalent to its 7-Day Reverse Repo Rate (benchmark policy rate). BBG sources revealed that the plan is supported by majority of lawmakers.
• Officials face the task of persuading investors that Bank Indonesia's independence remains intact and that the expansion of the bond-buying scheme is an "extraordinary policy". BI Gov Warjiyo said that the measure may have some inflationary effect in 2023.
• Moody's said Tuesday that Indonesia will probably miss its target of lowering budget deficit below 3% of its GDP by 2023 as the government's core strategy of expenditure consolidation is threatened by the latest outbreak of Covid-19.
• Pres Widodo will speak at the national coordination meeting on inflation management at 0955WIB/0355BST. Elsewhere, Bank Indonesia will publish monthly report on money developments, while top economic officials will participate in a working meeting on 2022 state budget at parliament's budget committee.