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15 May 2015
USD/IDR expected to grind lower – Rabobank
FXStreet (Edinburgh) - Michael Every, Strategist at Rabobank, expects USD/IDR to heads towards lower levels in the upcoming months.
Key Quotes
“We have reversed our previous bullish view on IDR. Despite the fact that it arguably remains undervalued, there has been a consistent deterioration in overall growth: Q1 GDP declined to just 4.7% YoY”.
“Moreover, Bank Indonesia appears to be happy with the currency continuing to weaken as long as this allows it to accumulate FX reserves”.
“At the same time, the Widodo administration appears to be suffering from policy drift less than a year into office, undermining hopes for an “Abe/Modinomics”-style bounce”.
“On that basis, we look to see IDR drifting lower over the course of 2015”.
Key Quotes
“We have reversed our previous bullish view on IDR. Despite the fact that it arguably remains undervalued, there has been a consistent deterioration in overall growth: Q1 GDP declined to just 4.7% YoY”.
“Moreover, Bank Indonesia appears to be happy with the currency continuing to weaken as long as this allows it to accumulate FX reserves”.
“At the same time, the Widodo administration appears to be suffering from policy drift less than a year into office, undermining hopes for an “Abe/Modinomics”-style bounce”.
“On that basis, we look to see IDR drifting lower over the course of 2015”.