The GBP to IDR exchange rate is currently bullish, exhibiting a strong upward trend.
Key drivers influencing this movement include the interest rate differential between the Bank of England and Bank Indonesia. The Bank of England's recent hawkish signals indicate a potential slowdown in rate cuts, supporting the pound. In contrast, Bank Indonesia has set a lower inflation target and is actively stabilizing the rupiah through market interventions. Additionally, recent positive retail sales figures from the UK bolster expectations of economic resilience, further strengthening the GBP.
In the near term, the exchange rate is expected to range within a stable zone as it is currently at 90-day highs, showing notable strength against its recent average.
An upside risk could arise from stronger-than-expected UK economic performance, prompting further GBP gains. Conversely, a downside risk may emerge if Bank Indonesia’s intervention strategies effectively stabilize the rupiah or if fiscal concerns surrounding the UK government lead to pessimism around the GBP.