Controversial Omnibus Jobs Bill Supports IDR

Spot USD/IDR sold-off sharply this morning, catching up with greenback weakness and headlines noting that Indonesian lawmakers passed President Joko Widodo's flagship omnibus law on labour and investment rules ahead of schedule. The news came out after onshore IDR trading hours on Monday. The rate sits -103 pips at IDR14,698 as we type.

• MPs brought forward the vote originally planned for Oct 8 and held it just one day before 2 million workers were poised to organise a three-day strike against the legislation over potential consequences for job security. The 1,000 page bill constitutes a major overhaul of over 70 regulations. It aims at attracting investment and creating jobs by cutting red tape and simplifying existing rules on labour, foreign ownership or environmental standards.
• The rate dipped through its 50-DMA and Sep 21 low at the re-open, but has promptly clawed back some losses. That said, it still trades at depressed levels, with bears looking for a break below the 100-/200-DMAs at IDR14,575/14,555, which would open up Aug 31 low of IDR14,505. Conversely, a jump above Sep 25 high of IDR14,919 would allow bulls to take aim at Sep 11 high of IDR14,950.
• Bank Indonesia releases its consumer confidence gauge today, ahead of next week's monetary policy decision.