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IDR: USD/IDR Firmer Ahead Of BI Decision, No Change Forecast But Close Call

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Spot USD/IDR is firmer in the first part of Wednesday dealings, the pair last at 16350, up close 0.50%. Part of this may reflect catch up to Tuesday broader USD gains, but with the 1 month USD/IDR also up from end Tuesday NY levels, fresh USD demand appears evident so far today.

  • For USD/IDR spot, recent highs have rested close to 16400, while on Feb 3 we spiked to 16471. We are above all key EMAs, with the 20-day back under 16300. The 50-day is further south close to 16185.  
  • Some nervousness may be creeping in ahead of the BI decision later. The BBG sell-side consensus is for no changed, but there are a number of economists forecasting a cut today. Our own bias is for no change, but we had a surprise earlier in the year with a cut, as BI's priorities shifted somewhat to economic growth.
  • USD/IDR looks a little too elevated relative to real US yield levels, but is still showing a firm directional correlation. ID-US 10yr spreads are back to +222bps. We were above +250bps for much of Jan.
  • Local equities are from recent lows, while offshore portfolio flows are less negative in recent sessions, but we have still seen outflows in Feb to date. 
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Spot USD/IDR is firmer in the first part of Wednesday dealings, the pair last at 16350, up close 0.50%. Part of this may reflect catch up to Tuesday broader USD gains, but with the 1 month USD/IDR also up from end Tuesday NY levels, fresh USD demand appears evident so far today.

  • For USD/IDR spot, recent highs have rested close to 16400, while on Feb 3 we spiked to 16471. We are above all key EMAs, with the 20-day back under 16300. The 50-day is further south close to 16185.  
  • Some nervousness may be creeping in ahead of the BI decision later. The BBG sell-side consensus is for no changed, but there are a number of economists forecasting a cut today. Our own bias is for no change, but we had a surprise earlier in the year with a cut, as BI's priorities shifted somewhat to economic growth.
  • USD/IDR looks a little too elevated relative to real US yield levels, but is still showing a firm directional correlation. ID-US 10yr spreads are back to +222bps. We were above +250bps for much of Jan.
  • Local equities are from recent lows, while offshore portfolio flows are less negative in recent sessions, but we have still seen outflows in Feb to date.