USD/IDR holds near 10-month high post-upbeat Indonesia's CPI
|Indonesia’s annual inflation rate accelerated in February, according to the latest data published by Statistics Indonesia on Monday.
Indonesian February’s inflation rate rose to 2.98% on the year, compared with December’s 2.68% and 2.86% expectations but remained between the Bank Indonesia’s (BI) 2.5-4.5% target range. The annualized core figure arrived at 2.76% vs. 2.88% previous and 2.85% expected.
Meanwhile, the monthly inflation reading for February came in at +0.28% vs. +0.18% expected and +0.39% last.
About Indonesia’s CPI
The Inflation index released by the Statistics Indonesia is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of Indonesian Rupiah is dragged down by inflation. The CPI is used as a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the Rupiah, while a low reading is seen as negative (or Bearish).
Market reaction
The USD/IDR cross extends its ongoing winning streak on Monday, now printing the strongest levels in ten months at 14,415, up 0.52%. The Indonesian Rupiah remains undermined by the coronavirus outbreak-led growing economic concerns.
The Indonesian authorities’ efforts to stem the IDR declines also seem to be in vain. Bank Indonesia Governor Warijyo said that “we continue to do 'triple intervention' to stabilize financial markets.”
Meanwhile, Indonesian Financial Services Authority Chief noted that the protocols to prevent market collapse are in place while urging markets to remain calm.
In yet another effort to stabilize the markets, Indonesia's stock exchange announced a suspension of short-selling by removing all stocks from a list in which the activity is allowed, until further notice.
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