USD/IDR set to move within a range of 15,640 to 15,800 in the week ahead – MUFG

USD/IDR has moved in a bid tone over the past week, stabilising close to the 15,700 level after being as low as close to 15,400 on 11 November. Economists at MUFG Bank see the pair within a range of 15,640 to 15,800 for the week ahead.

BI hikes to continue

“Bank Indonesia has hiked policy rates by 50 bps. We expect BI to hike a few more times in the coming meetings. We now forecast the 7-day reverse repo rate to end 2022 at 5.50% (with some chance of 5.75%) and to reach 6.00% sometime in Q1-2023.”

“We see USD/IDR within a range of 15,640 to 15,800 for the week ahead, slightly biased on the upside.”

“For end-2022, we forecast the pair at 15,700 as the USD finds some stability after prior strength.”