Rupiah Dips After BI Keep Key Rate Unchanged, Pledge Pro-Stability Stance

Spot USD/IDR has picked up a bid, adding 43 figs so far. The rate trades at IDR14,386 and bulls look for further gains towards Dec 6 high of IDR14,447, after Dec 10 high of IDR14,383 gave way. Bears need a fall through yesterday's low of IDR14,315 before targeting Nov 30 low/100-DMA at IDR14,293/14,288.

• USD/IDR 1-month NDF last +29 figs at IDR14,412. Bulls eye Dec 3 high of IDR14,545 for initial resistance, while bears would be pleased by a slide through the 100-DMA at IDR14,330.
• It came as no surprise that Bank Indonesia kept their 7-Day Reverse Repo Rate unchanged on Thursday, as forecast in our preview and expected by virtually all analysts. Policymakers pledged to leave the benchmark interest rate on hold until they see signs of inflation picking up.
• Governor Warjiyo pushed back against suggestions that Fed rate hikes might force Bank Indonesia to follow suit. He noted that when the central bank sees a case for tightening, they will gradually reduce liquidity and interest rates "will be determined by our assessment of inflation and economic growth in 2022 until 2024." The Governor confirmed that Bank Indonesia will pursue a "pro-stability" monetary policy, which marks a shift from the "pro-growth" stance from earlier this year.
• Pres Widodo urged Indonesians to remain calm and observe existing health protocols, following the discovery of the first local case of the Omicron variant.