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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
IDR
Spot USD/IDR continues to trade at elevated levels, close to the psychological barrier at IDR15,000, even as Indonesia's CPI inflation accelerated to +4.35% Y/Y in June from +3.55% prior, exceeding expectations and breaching Bank Indonesia's +2.0%-4.0% Y/Y target range.
- Analysts expected headline inflation to print at +4.19% Y/Y, according to Bloomberg consensus. Bank Indonesia said prices could rise +0.50% M/M, based on its weekly survey as of the fourth week of June (it didn't give the annual figure). Monthly growth in prices came in above that level, at +0.61%.
- The data confirms that Indonesia's real policy rate (7-Day Reverse Repo Rate less headline inflation) has moved further into negative territory, raising pressure on the central bank to tighten.
- Still, the central bank has previously stated that it will focus on underlying inflation in deciding the timing of policy normalisation. Core CPI came in at +2.63% Y/Y, slightly missing the +2.70% level expected by analysts.
- Separately, Indonesia's S&P Global M'fing PMI slipped to 50.2 in June from 50.8 in May, with "the general health of Indonesia's manufacturing sector was close to stagnating in June." But the inflation report stole the limelight.
- Spot USD/IDR has added 55 figs and now sits at IDR14,953, with the IDR15,000 mark in sight. Above there opens May 5, 2020 high of IDR15,138. Bears keep an eye on Jun 27/21 lows of IDR14,794/14,784.
- USD/IDR 1-month NDF last +23 figs at IDR14,980. Topside focus falls on Jun 30 high of IDR15,004, while bears look for losses towards Jun 27 low of IDR14,788.
- MYR/IDR is now challenging its 200-DMA (IDR3,392) and last trades +13 figs at IDR3,393.22. A close above there would be a boon for bulls, opening the way to the nearby IDR3,400 mark. Bears look for a pullback towards Jun 27 low of IDR3,358.
Fig. 1: Indonesia Real Policy Rate (%)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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