USD/IDR: Bank Indonesia to hold amid rupiah weakness – TDS
|IDR has reached a 5-month low against the USD due to the backup in US yields and bond portfolio outflows. Bank Indonesia (BI) is likely to be mindful not to exacerbate IDR depreciation pressures through further rate cuts. Improving growth prospects should give BI some space to keep rates on hold and economists at TD Securities expect BI to reiterate its accommodative stance on Tuesday, April 20.
BI sees IDR as "very undervalued" following its depreciation over recent months
“We expect BI to keep its 7-day reverse repo rate on hold at 3.50% on Tuesday 20 April amid IDR depreciation concerns.”
“BI is likely to be mindful not to exacerbate IDR depreciation pressures through further rate cuts. In any case, improving growth prospects should give BI some space to keep rates on hold this month. We expect BI to reiterate its accommodative stance.”
“We expect a limited IDR reaction from an on hold decision at this meeting especially given broad consensus for BI to stand pat.”
“Expect further comments at the BI meeting expressing concern about IDR weakness and commitment to keep the currency supported.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.