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No Relief For IDR From US Yield Pull Back So Far

IDR

The pull back in US nominal yields has done little to benefit the Indonesia rupiah in recent dealings. USD/IDR has pushed to fresh highs near 15720. This puts the pair near December 2022 highs of 15763. Today's loss is nearly 0.20%, which is modest but generally bucking the softer USD trend seen elsewhere in the region. The 1 month NDF was last near 15730.

  • Reuters reported that offshore USD buying is weighing on the rupiah. This would fit with recent outflow momentum from local bonds, up to last Friday we had seen -$311.5mn in outflows in October to date.
  • Foreign holdings of Indonesian government bonds are back to late March levels.
  • Indonesia credit is also worsening, with yields on corporate bonds seeing a decent rise over the past month (see this BBG link for more details).
  • Note the data calendar is relatively quiet for the rest of the week, with September trade figures out next Monday.

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