FxWirePro: Bank Indonesia slashes benchmark interest rate by 25 bps, USD/IDR slips lower from 8-day high

USD/IDR chart - Trading View 

The Bank of Indonesia slashed its benchmark 7-day reverse repo rate by 25bps at its February monetary policy meeting held this Thursday.

Indonesia bonds were sold off heavily on Wednesday and the rupiah slipped, prompting several analysts to scale back bets of a 25 basis point interest rate cut as the central bank has prioritised currency stability in the past.

After maintaining the country's benchmark interest rate at 3.75% since December 2020, the bank cut rates to an all-time low of 3.50%.

Bank Indonesia kept 2021 current account deficit estimate at 1% to 2% of GDP. While, it revised down 2021 GDP outlook to +4.3% to +5.3%, vs +4.8% to +5.8% range previously.

The Indonesian Rupiah (IDR) caught a fresh bid wave vs. the US dollar. USD/IDR slips lower from 8-day high at 14053.18 to trade at 14033.0 at 08:00 GMT.

Price action hovers around 21-EMA. Technical bias is bullish, but the pair finds stiff resistance at daily cloud. Break above will see further gains.