Indonesian Rupiah: Depreciation bias with MSCI risk – MUFG
MUFG’s Lloyd Chan highlights that MSCI reclassification risk could trigger a broader Indonesia risk-premium shock, weighing on the Rupiah and local assets.
Lloyd Chan from MUFG points out that MSCI's potential reclassification could lead to a wider Indonesia risk-premium shock, negatively impacting the Indonesian Rupiah and local assets. The bank identifies existing headwinds for the IDR, including high oil prices, a weaker external balance, and higher US yields. MUFG maintains a depreciation bias and forecasts a weaker Rupiah, projecting USD/IDR rates of 18,350 by the end of 2026, 18,500 in Q1 2027, and 18,700 in Q2 2027.
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