Modest IDR Underperformance On Lower Equities/Commodities

Spot USD/IDR has crept higher today. The pair last near 14710, with offers evident above 14720. This is only slightly weaker than yesterday's close, but the rupiah is underperforming the rest of the USD/Asia bloc, where USD weakness is more evident.

• This likely reflects renewed risk aversion in the equity space, which has seen Indonesia 5yr CDS creep higher, last just above 97bps. Weaker commodities are also likely to be weighing at the margins. Palm oil prices are lower, back to 3969/MYR, with likely some spillover from the oil plunge on Tuesday.
• Still USD/IDR is only modestly above YTD lows under 14640, so today's weakness only unwinds a fraction of the recent outperformance.
• The data calendar is quiet until Friday when Q1 GDP prints. The market expects a contraction of nearly 1% but Y/Y growth steady at 5%.
• Economic ties also appear to be building between South Korea and Indonesia, with POSCO to invest $441mn to build a nickel refining plant in Indonesia. The BoK and BI have also signed a won-rupiah direct transaction agreement.