Rupiah Shows No Reaction To Stand-Pat Rate Decision

Spot USD/IDR has been unfazed by Bank Indonesia's monetary policy decision and closed +55 figs at IDR14,845. The recent rebound from cyclical lows can still be considered corrective, following the recent formation of a 50-DMA/200-DMA "death cross." However, the RSI's return from oversold territory should be seen as a red flag and gains past the psychological IDR15,000 figure would support the case for continued recovery.

• USD/IDR 1-month NDF trade -15 figs at IDR14,860, snapping a two-day winning streak. Bearish focus falls on Apr 14 low of IDR14,654, a recent cyclical low. Conversely, bulls keep an eye on the IDR15,000 round figure.
• Bank Indonesia left its 7-day reverse repo rate on hold at 5.75%, as expected by all economists polled by Bloomberg, and revised its forecast for the return of headline inflation to the +2.0%-4.0% Y/Y target band to August from September.
• The central bank said that it expects the rupiah to continue appreciating, even as it has been comfortably the best performing Asian currency this year. At the same time, Bank Indonesia will keep stabilising the rupiah to mitigate imported inflation.