SGD/IDR Outlook:
Slightly positive, but likely to move sideways as the rate is above its 90-day average, though it currently lacks a clear driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore has adopted a more accommodative policy, contrasting with Bank Indonesia's focus on growth over currency stability.
• Risk/commodities: Global oil prices remain volatile, affecting the demand for commodities from emerging markets like Indonesia, putting downward pressure on the IDR.
• One macro factor: Political uncertainty surrounding the new Bank Indonesia governor may deter foreign investment and weaken the IDR.
Range:
Expect SGD/IDR to move within its recent stable range, holding above its 90-day average but possibly testing lower limits.
What could change it:
• Upside risk: A significant improvement in Singapore's export performance could strengthen the SGD.
• Downside risk: Continued capital outflows coupled with external economic pressures could further weaken the IDR.