Indonesian Rupiah: Oil gains and BI decision shape IDR – OCBC
OCBC’s Sim Moh Siong and Christopher Wong note that Indonesian Rupiah (IDR) weakness is driven by higher Oil prices and elevated global yields, even as domestic sentiment improves after President Prabowo’s speeches and the BI governor nomination.
The Indonesian Rupiah (IDR) has been weakened by higher oil prices and elevated global yields, despite improving domestic sentiment after President Prabowo's speeches and the Bank Indonesia (BI) governor nomination. Technical analysis indicates waning bearish momentum in USD/IDR, with the possibility of two-way trades. The key resistance level is around 17940, while support can be found at 17760 and 16620.
President Prabowo's proposals for a 2.4% fiscal deficit in 2027 and clarification on the role of the new commodity-export agency have helped ease concerns over fiscal discipline. The nomination of Destry Damayanti as BI governor has also provided reassurance on policy continuity. However, IDR remains sensitive to oil-price fluctuations and broader risk sentiment.
Near term, Forex traders will focus on the Bank Indonesia, where FX stability and policy guidance may have a more significant impact on IDR than the rate decision itself. Currently, USD/IDR is trading at 17857.
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