BI Intervenes To Counter Rupiah Weakness

Bank Indonesia stepped into spot & domestic NDF markets to shore up the rupiah as USD/IDR caught a light bid in early trade. BI offered 1-month domestic NDF at IDR14,110 via brokers & auctioned 1-month domestic NDF at IDR14,105, before intervening directly in FX spot interbank market. Spot USD/IDR changes hands +33 at IDR14,055 as we type, while 1-month NDF trades -17 at IDR14,132.

• Monday briefing with BI Gov Warjiyo provided some interest, with the official pledging to keep interest rates low and liquidity ample until inflationary pressure starts picking up. He added that BI will try and improve monetary policy transmission by devising a rule that would require banks to report cost of funds, administrative cost and margin. Furthermore, BI is in talks with the Finance Ministry & industry reps on policy to boost credit in selected sectors.
• Spot USD/IDR remains capped by the 50-DMA, intersecting at IDR14,088. A break above that level would expose Jan 18 high of IDR14,103, followed by Jan 12 high of IDR14,205. On the flip side, a slide through Jan 22 low of IDR13,993 would bring Jan 4 low of IDR13,865 into view.
• Nothing much on the local docket for the remainder of this week.