USD/IDR: Rupiah strengthens despite Bank Indonesia’s rate cut
At its July monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), slashed its 7-day reverse repo rate by 25bps to 5.75%, as widely expected.
The latest Reuters poll showed that 23 of 33 analysts predicted BI will make a 25-basis point trim in the benchmark 7-day reverse repo rate to 5.75% - which would be the first cut since September 2017.
The central bank Governor noted that several central banks have pursued dovish monetary policies, including the Fed.
Additional Comments:
Q2 GDP growth seen at same pace with Q1.
2019 economic growth seen at below midpoint of 5.0-5.4% outlook.
Efforts to support domestic demand needed to mitigate falling exports.
To work with other authorities to lift economic growth.
2019 c/a deficit seen at 2.5%-3% of GDP, below 2018's.
Sees y/y inflation at end-2019 below midpoint of 2.5-4.5% target range.
To pursue accommodative macroprudential policy to support lending growth.
On the dovish decision by the Indonesian central bank, the Indonesian Rupiah (IDR) strengthened against its American counterpart, pushing the USD/IDR cross to daily lows of 13,925 before recovering now to 13,950 levels.
USD/IDR Technical Levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
