Rupiah Slips, Bank Indonesia Rate Review Draws Nearer

Spot USD/IDR has flatlined over the past two weeks after plumbing a cyclical high of IDR15,024 on Jul 6. With the rate last trading +11 figs at IDR14,993, bulls look for a clean break above that level, before targeting May 5, 2020 high of IDR15,138. Bears would be pleased by a fall towards Jun 27/21 lows of IDR14,794/14,784.

• USD/IDR 1-month NDF last seen +31 figs IDR15,063. Topside focus falls on Jul 15 cycle high of IDR15,190, with bears targeting Jul 8 low of IDR14,966.
• MYR/IDR trades at IDR3,364, barely changed on the day. Continued sales past Jun 27 low of IDR3,358 would shift focus to IDR3,349, the broken neckline of a double-bottom formation. Bulls need a rally above the IDR3,400 mark to regain momentum.
• SGD/IDR deals at IDR10,728, up ~5 figs on the day. Next resistance is at IDR10,763, the high print of Jul 14. Bears look for a pullback towards Jul 12 low of IDR10,636.
• Bank Indonesia stepped up efforts to drain excessive liquidity from the system by selling off its holdings of government bonds in secondary market. It shed IDR390bn worth of assets on Monday, with more sales planned in the future.
• The main point of note on the local docket this week is monetary policy review from Bank Indonesia. Most economists expect policymakers to keep the 7-Day Reverse Repo Rate unchanged, but around a third of those surveyed by Bloomberg have pencilled in a 25bp hike.
• Elsewhere, President Widodo is preparing to visit China, Japan and South Korea later this month. Senior officials from Indonesia and the three East Asian countries are believed to still be discussing the order and character of Jokowi's visits.