USD/IDR Off Recent Highs, Won't Require Mandatory Conversion Of Export Proceeds Into IDR

USD/IDR has backed away from the 15300 level, last tracking just under 15240, around 0.20% firmer in IDR terms versus yesterday's close. The pair remains wedged between the 50-day (15279) and 200-day (15158) MAs. Tomorrow the PMI and CPI data prints for Feb are due. The market expects an uptick in y/y CPI to 5.42% (form 5.28%), but core is expected to remain benign at 3.24% y/y (versus 3.27% prior).

• The authorities have also announced plans around its export conversion rule. It will apply to export proceeds of at least $250k, while earnings can be kept in foreign currency or rupiah. This latter point was seen as an issue for some market participants, in that if Indonesia went down the path of mandatory export conversion it would amount to capital controls.
• The Coordinating Minister for Economics Affairs sort to play down such risks, and stated the rules won't conflict with international regulations.
• Elsewhere, some consolidation in US yields has likely aided IDR sentiment at the margins. Outflows from local bonds have also slowed, while yesterday also saw $222.9mn in inflows into local equities. This bucked the trend of outflow pressures for the rest of the region.