USD/IDR To Multi Week Lows On Improved Global Risk Appetite, BI On Tap Later

USD/IDR is back near 15250, lows back to the first half of August. We aren't too far away from the simple 200-day MA which comes in at 15210, the 20-day EMA is slightly higher around ~15218. Spot IDR gains are close to 0.30% at this stage. Recent highs in the pair come in near 15360.

• The rupiah is benefiting from the broader improvement in risk appetite, which is being led by global equities at this stage. Indonesian equities are lagging regional trends today, with the JCI close to flat. Offshore investors added to local equities yesterday, but remain net sellers for the week to date and in August as a whole (-$1133.7mn).
• The pull back in US real yields on Wednesday, the 10yr down 15bps to +184bps has also helped, following softer US/EU PMI data. This has also helped the global equity story. Indonesian 5yr CDS has rolled back over in the past week (back to 81bps, versus recent highs near 92bps).
• The focus ahead will be on the upcoming BI policy meeting later. No changes to rates are expected, with recent IDR weakness the central bank is unlikely to turn too dovish. It is likely to reiterate other policy tools it has to guard against FX depreciation/guide markets towards equilibrium levels.