USD/IDR to near the 15,000 level in the coming months – DBS Bank

The Indonesian rupiah has held up well into the Fed taper. The trading range was significantly narrower between 13,865 and 14,630 (5%-wide) this year compared to 13,575-16,625 (22%-wide) last year. In 2022, economists at DBS Bank expect USD/IDR to trade around the 14,500-15,000 region.

BI to keep rates low for most of 2022

“IDR to depreciate into 14,500-15,000 per USD ahead of two Fed hikes in 4Q22.”

“The central bank (BI) intends to keep rates low for most of next year to help the nascent recovery (from the third covid wave) gain traction. In line with BI’s guidance, we have pencilled in a rate hike to 3.75% from 3.50% in 4Q22.” 

“We expect real GDP growth to pick up to 4.8% in 2022 from a projected 3.6% in 2021, and CPI inflation double to 3.0% from 1.5%.”