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Remains A Laggard, NEER Now 6% Down On Late September Highs

IDR

The rupiah is not seeing much benefit from USD/Asia weakness elsewhere in the region. Spot USD/IDR is just under 15730, very close to recent cyclical highs around 15750. The 1 month NDF is at 15737, down only slightly from NY closing levels.

  • The currency has been the worst performer in November to date within EM Asia FX by a comfortable margin (-0.83%), with INR at +1.43% against the USD, the next worst.
  • The IDR NEER (J.P. Morgan Index) has lost over 6% since its late September peak and is back to February levels from this year.
  • A late month boost to foreign ownership of local bonds (+2.8%) hasn't flowed through to local currency gains, although net equity outflows have been an offset (-$55.3mn for the month). This has slowed the net inflow outperformance trend seen through parts of 2022. Local equities are tracking towards the bottom end of their recent range (close to 7000 for the JCI).
  • This, coupled with a firmer US real yield backdrop is weighing, although USD/IDR looks too high relative to US real yields.
  • The data calendar is quiet until Thursday’s CPI print.

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