Rupiah Prints Cylical Lows, Despite Bank Indonesia's 50bp Rate Hike

Spot USD/IDR has inched higher, in tandem with its regional peers. Gains have been limited in the wake of yesterday's monetary policy decision from Bank Indonesia, but the rupiah remains the worst performer in the Asia EM basket on a weekly basis.

• The spot rate last +40 figs at IDR15,613. A break above Apr 16, 2020 high of IDR15,754 would bring the IDR16,000 figure into view. Bears look for losses past Oct 5/Sep 30 lows of IDR15,162/15,150.
• USD/IDR 1-month NDF last +63 figs at IDR15,650. The IDR16,000 threshold provides the initial layer of resistance, while bears look for a dip towards Oct 5 low of IDR15,158.
• Bank Indonesia raised the key policy rate by 50bp. The consensus call was leaning towards the realised outcome, albeit a third of surveyed analysts dissented to the dovish side. Governor Warjiyo deployed firmer language around rupiah management, expressing the intention to "control" the exchange rate.
• There were some marginal tweaks to the opening paragraphs of the statement versus its September version, as policymakers added the word "overshooting" to describe inflation expectations and said they wanted to bring core inflation into the target corridor in the first rather than second half of 2023.
• Softening the hawkish message sent by the second consecutive 50bp rate hike, the central bank maintained accommodative macroprudential settings to support the ongoing economic recovery.