Rupiah Struggles For Any Positive Catalysts, BI In No Rush To Tighten

Spot USD/IDR has added 5 figs and last changes hands at IDR14,878, with focus on heightened geopolitical risks in the region & dovish comments from BI Gov Warjiyo in response to CPI data released yesterday. Bulls look for a firmer jump, preferably past Jul 22 cycle high of IDR15,038. Bears keep an eye on the nearby 50-DMA, which intersects at IDR14,815.

• USD/IDR 1-month NDF sits +16 figs at IDR14,874 after finding support in its 50-DMA over the past two days. Further gains past Jul 21 high of IDR15,133 would bring Jul 15 cycle high of IDR15,190 into view. Bears look for a pullback under the 50-DMA at IDR14,833.
• Inflation figures released out of Indonesia on Monday are unlikely to force the central bank to front-load tightening. Core CPI accelerated to +2.86% Y/Y but matched expectations and stayed below the mid-point of the target range. Following the release, Governor Warjiyo noted that underlying price pressures are "still low," with the central bank seeing "no need to quickly raise interest rates."
• In negative news for the rupiah, Indonesia's 5-year CDS premium continues to widen off its recent narrows (albeit at this point this rebound seems merely corrective).
• Cross-asset signals are also unsupportive, as the benchmark Jakarta Stock Exchange Composite Index has slipped (last -0.45% at 6,938), while palm oil futures have extended yesterday's rout (active contract last -MYR163 at MYR3,897.00/MT).
• An official with Indonesia's Trade Ministry suggested that the government is considering extending waiver on palm oil export levy in a bid to boost shipments. As mentioned in our earlier bullets, Indonesia is trying to increase exports as its storage tanks are fully filled, raising the risk of fresh fruit bunches being left to rot.
• FinMin Indrawati and Economic Affairs Min Hartarto will speak at a 2022 economic outlook seminar today.
• Looking ahead, Indonesia's Q2 GDP will hit the wires on Friday.