USD/IDR Back Above 15300, Bond Outflows Offsetting Better Equity Inflows

USD/IDR is holding above 15300, +0.25% firmer for the session, although we sit below session highs near 15320. The mid August surge in USD/IDR towards 15360 peaked out, so this could be levels to watch on the top side. The BI continues to view the currency on the cheap side, so intervention risks are likely to remain elevated. On the downside, the 20-day EMA sits back near 15244.

• The data calendar remains light, which leaves IDR at the whim of broader risk appetite. Local equities are close to multi-month highs, the JCI last around 7000, with offshore inflows +$73.7mn so far this month. Firmer global commodity prices should be a positive for local equities, all else equal.
• Some offset is coming from bond outflows, with $-115.5mn in outflows month to date, and relatively light foreign participation at yesterday's debt auction.
• The elevated core yield back, particularly US real yields (10yr back near +200bps) is a headwind for such inflows and IDR more broadly.
• On the news front, China pledged closer ties with Indonesia at the ASEAN summit (see this link). The Indonesian authorities also expect to reach an agreement with the US on the inflation reduction act by November (see here for more details).