USD/IDR to advance nicely towards 13,800 by end-2021 – Standard Chartered
|The Indonesian economy is set to recover from pandemic shock as the economy re-opens and vaccines are deployed. Economists at Standard Chartered expect BI to squeeze in a 25bps policy rate cut to accelerate recovery, before pausing for the year and remain constructive on the IDR, given a manageable C/A deficit, relatively high carry and a weak USD.
Key quotes
“We forecast 2021 GDP growth at 6.0%, following a 1.7% contraction in 2020, on normalisation of economic activity, low base and exports recovery.
“Inflation will increase gradually to 2.9% by year-end. Below-potential growth and stable food prices to keep inflation at BI’s target.”
“We expect another 25bps policy rate cut in February to 3.5% before BI pauses in H2. BI again likely to focus on quantitative easing to support fiscal stimulus.”
“We expect USD/IDR to strengthen to 13,800 by end-2021, amid manageable C/A deficit, relatively high carry and a weak USD.”
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.