Indonesian Rupiah: Policy uncertainty weighs on IDR against US Dollar – ING
ING economists Deepali Bhargava and Lynn Song flag renewed policy uncertainty for the Indonesian Rupiah (IDR) after the surprise resignation of Bank Indonesia’s (BI) governor, just as sentiment toward Indonesian assets was improving.
Indonesian economists have expressed concern over the weakening of the Indonesian Rupiah (IDR) due to policy uncertainty following the unexpected resignation of Bank Indonesia’s governor, just as sentiment towards Indonesian assets was improving. While Acting Governor Damayanti is expected to maintain stability in the short term, the future direction of monetary policy remains uncertain.
The resignation has raised questions about Bank Indonesia's independence and the central bank's stance on monetary policy, which could further weaken the rupiah. Foreign investment in local bonds had started to recover following recent rate decisions and stabilization measures, but the resignation has cast a shadow on these positive trends.
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