USD/IDR to move downward as risk-averse sentiment is likely to grow – Mizuho

In November, USD/IDR continued fluctuating without moving in any direction. In December, the Indonesian rupiah is likely to remain weak against the US dollar. This is due to the progress on global economic recovery being slowed by the detection of the omicron variant, economists at Mizuho Bank report. 

Uncertain elements regarding the omicron variant to keep the market unstable in the near-term

“The omicron variant is only likely to lead the USD/IDR to fluctuate from a short-term perspective. From a medium to long-term perspective, the Indonesian rupiah is likely to weaken, regardless of whether or not the variant will become a threat to daily life and the global economy.”

“The October trade surplus of Indonesia recorded its largest trade surplus on a single-month basis. If the situation remains the same, it would keep the Indonesian rupiah exchange rate from falling further. However, commodity prices could fall significantly, depending on the situation related to the omicron variant of covid.”