USD/IDR Outlook:
The USD/IDR is slightly positive but likely to move sideways as the rate stands just above its recent average and within a stable range. Current geopolitical tensions continue to support the USD.
Key drivers:
• Rate gap: The US Federal Reserve maintains a tighter monetary policy compared to Bank Indonesia's recent interventions to support the rupiah.
• Risk/commodities: Oil prices are elevated due to concerns about supply disruptions, increasing global demand for USD as oil is priced in it.
• Fiscal stimulus: The Indonesian government's recent fiscal stimulus announcements aim to support economic growth, impacting the IDR positively.
Range:
The USD/IDR is likely to drift within its recent range of 16627 to 16970.
What could change it:
• Upside risk: A significant escalation in geopolitical tensions could push USD higher.
• Downside risk: Any rapid improvement in Indonesia’s economic performance could strengthen the IDR against the USD.