USD/IDR Outlook:
The USD/IDR exchange rate is slightly positive but likely to move sideways, as it is trading near its 3-month average in a stable range, with no clear catalysts driving the trend.
Key drivers:
• Rate gap: The Federal Reserve's interest rate maintenance supports the USD, while Bank Indonesia's steady rate reflects a struggle against a depreciating IDR.
• Risk/commodities: Oil prices remain volatile, influencing market stability and affecting currency movements, particularly for the IDR.
• One macro factor: Indonesia's recent updates on export foreign exchange policy aim to strengthen the IDR but may take time to create impact.
Range:
Expect the USD/IDR to maintain its position within the recent 3-month range, with potential for slight fluctuations but not extreme movements.
What could change it:
• Upside risk: A breakthrough in US economic data could further strengthen the USD.
• Downside risk: Increased geopolitical tensions impacting the IDR might lead to further depreciation.
