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USD/IDR Close To Late May Highs, BI Decision On Tap This Week

IDR

USD/IDR is approaching late May highs just above 15000. The pair was last at 14994, +0.40% higher in USD/IDR terms versus Friday's onshore closing levels. The simple 100-day MA is not far away, around 15020 in terms of upside resistance, which the 50-day MA is back closer to 14860 on the downside. The 1 month NDF is already above 15000 (last 15010), which is also close to end May highs.

  • IDR has become somewhat disconnected with the better global equity market backdrop, which would imply IDR at stronger levels compared with those currently prevailing.
  • 5yrs CDS is relatively steady though, not showing signs of breaking lower, last at 83bps, while onshore equities are around the mid-point for ranges seen in June so far.
  • Portfolio flows are mixed, climbing for debt (+$795.1.8mn so far this month), but negative for equities, -$189.7mn month to date.
  • Some negative carry over for IDR may be also evident from the recent trade data miss, with Indonesia's terms of trade, well off 2022 highs.
  • This week we have the BI decision on Thurs, no change is expected. BI continues to view the FX rate as undervalued, so this may be a renewed focus point, which is something the market is likely to be wary of with USD/IDR spot so close to recent highs.
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