USD/IDR Back Above 15700, Rupiah Stability Key To BI Rate Cuts

USD/IDR has risen in the first part of trade, last above 15700, around 0.3% weaker in IDR terms versus end Friday levels onshore. The 1 month NDF is slightly lower, last near 15720, and compares with Friday highs (post the US NFP print) of around 15740.

• These moves keep us within recent ranges, with the recent spike above 15800 drawing interest intervention rhetoric (and actual action from the Indonesian authorities). Friday lows in the pair were close to 15645.
• Weekend comments from BI Governor Perry Warjiyo reiterated that the rupiah is central to the outlook for easier policy settings. The Governor stated that it will look to rupiah stability in the second half to gauge the CB's ability to cut rates (see this BBG link).
• This is line with recent rhetoric and the rough market consensus around the timing of BI cuts.
• Later on today, we get Q4 GDP for Indonesia. Little change is expected in terms of y/y momentum. The y/y rate is projected at 5.00% (prior was 4.94%). The q/q pace is expected to step down to 0.4% from 1.6% in Q3.