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Onshore Rupiah In Retreat Ahead Of Bank Indonesia Rate Decision


Spot USD/IDR has rallied as risk tone remains negative in Asia, while Bank Indonesia's monetary policy review draws nearer. The pair changes hands +79 figs at IDR15,577 and bulls look for further gains towards the IDR16,000 figure. Bears keep an eye on Oct 5/Sep 30 lows of IDR15,162/15,150.

  • USD/IDR 1-month NDF last -14 figs at IDR15,607. The IDR16,000 mark provides the next layer of resistance, while bears look for a pullback past Oct 5 low of IDR15,158.
  • Foreign investors offloaded a net $6.02mn in Indonesian stocks Wednesday, while the Jakarta Comp strengthened. The index proceeded to a dynamic rally this morning, staging a re-test of support-turned-resistance from its 200-DMA, and last deals 1.2% higher.
  • Palm oil futures remain afloat, with the most active contract last seen +MYR21/MT, amid concerns surrounding the impact of adverse weather conditions on output from top two producers. The aggregate BBG Commodity Index is little changed on the day.
  • Bank Indonesia is expected to raise the 7-Day Reverse Repo Rate by 50bp, although analysts are split. Out of the 31 surveyed by Bloomberg, 19 are siding with the median estimate, 11 expect a 25bp move and 1 is forecasting a 100bp rate rise.
  • Ahead of the announcement, BI Gov Warjiyo said the central bank will remain "preemptive, front-loaded, and forward-looking" with respect to interest-rate action, while continuing to participate in the FX markets to stabilise the rupiah.

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