SGD/IDR Outlook: The outlook is slightly positive, but likely to move sideways as the rate is above its recent average and lacking a strong driver for further gains.
Key drivers:
- Rate gap: The Monetary Authority of Singapore has maintained its policy stance, while the Indonesian central bank is actively intervening to support the weaker rupiah, widening the rate gap in favor of the SGD.
- Risk/commodities: Ongoing global uncertainties have contributed to the IDR's depreciation near the critical threshold against the USD, which may weigh on the IDR's performance.
- One macro factor: The MAS has revised its inflation forecasts upward, indicating potential inflationary pressures that could impact the SGD in the longer term.
Range: The SGD/IDR is likely to drift within its recent 3-month range as neither currency shows strong momentum in the current environment.
What could change it:
- Upside risk: A significant improvement in global risk appetite could lead to stronger demand for the SGD.
- Downside risk: Further deterioration in investor confidence regarding Indonesian economic policies could exacerbate the IDR's weakness.
