USD/IDR Softens After BI MonPol Decision

Spot USD/IDR trades -65 pips at IDR14,768 at typing, having gapped lower at the re-open in a delayed reaction to yesterday's USD sales. The recent bullish crossover of the 50-DMA & 100-DMA has done little to arrest the move. Bears look for a dip through Sep 4 & 7 lows of IDR14,705, which would bring Aug 31 low of IDR14,505 into focus. Bulls see Sep 11 multi-month high/round figure of IDR14,950/15,000 as their initial target. Next resistance is at IDR15,138, the peak of May 5.

• Bank Indonesia left its main policy rate unchanged yesterday, as expected by all but two analysts taking part in the BBG survey. Focus fell on the central ban's rhetoric surrounding its own independence, after draft legislation on Bank Indonesia sparked concerns.
• BI Gov Warjiyo noted that the central bank's policy mix is "almost entirely directed towards synergies and coordination with the government" but pointed to Pres Widodo's & FinMin Indrawati's remarks that it must "remain credible, effective and independent".
• BI intervened in domestic NDF markets today to support the rupiah.
• In global trade news, China halted imports of aquatic products from an Indonesian company after finding coronavirus in its frozen fish packaging.
• Nothing much of note on Indonesia's economic calendar next week.