Halister News

(Bloomberg) -- USD/IDR 1-mo. NDFs may test support at psychological 13,000 level in near term if BI leaves its reference rate unchanged, as mixed U.S. data signal no Fed rate hike for now, Bloomberg strategist David Finnerty writes.

• BI will keep its reference rate on hold at 6.75%, according to 23 of 26 economists in a Bloomberg survey; three predict a 25-bps rate cut; decision due tomorrow
• Indonesia’s core CPI rose at a slower pace in March even as headline inflation edged higher, suggesting central bank could adopt a wait-and see stance
• After lowering rates in March, BI said it will become more careful in easing policy and strengthen operations framework and term structure of monetary policy rates, indicating central bank may stand pat at April 21 meeting as it monitors the effect of three rate cuts
• NOTE: BI said it will switch to 7-day reverse repo rate as its main policy instrument, effective Aug. 19, to help spur lending and support growth; even though BI cut its key rate by total of 75 bps this year, officials have noted that lending rates didn’t fall by same magnitude
• USD/IDR 1-mo. NDFs now up 0.1% to 13,165, still consolidating below resistance at 50-DMA of 13,290
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.