MUFG Bank Senior Currency Analyst Lloyd Chan notes that the Indonesian Rupiah (IDR) has retraced losses due to USD softness and the Bank of Indonesia’s focus on currency stability. However, the report warns of downside risks, including potential fiscal policy relaxations and geopolitical uncertainties that may limit sustained IDR appreciation. The analysis underscores the delicate balance facing the IDR.
Indonesian Rupiah faces challenges
“The IDR also saw notable moves, retracing its losses on the back of USD softness and Bank Indonesia’s emphasis on currency stability.”
“However, downside risks still persist, including the potential relaxation of the 3% fiscal deficit cap and broader geopolitical uncertainty, which may continue to limit the scope for sustained IDR appreciation.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/idr-currency-stability-emphasized-mufg-bank-202601261826
