Indonesian Rupiah: Softer Dollar offers limited relief – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong note that Indonesian Rupiah (IDR) should find some relief from a softer Dollar and lower long-end US yields, with BI keeping its policy rate at 5.75% and focusing on currency stability. BI is increasingly relying on non-rate tools like FX hedging incentives and SRBI. USD/IDR shows bearish momentum, with support at 17760 and 16630 and resistance at 17940.

BI holds rates, uses non-rate tools

"IDR is likely to find some relief from the softer USD and pullback in long-end US Treasury yields. Yesterday, BI kept its policy rate unchanged at 5.75% and maintained its focus on IDR stability, while reiterating measures to attract foreign inflows and deepen FX markets."

"The decision also reinforces policy continuity under acting Governor Destry Damayanti. BI appears increasingly inclined to rely on non-rate tools, including FX hedging incentives and SRBI, rather than pushing domestic rates materially higher."

"Near term, a sustained USD pullback would ease some external pressure on IDR, although elevated oil prices remain a constraint for Indonesia."

"USD/IDR last closed at 17830 levels. Bearish momentum on daily chart intact while RSI is flat for now. 2-way trades likely."

"Support at 17760, 16630 levels (100 DMA, 38.2% fibo retracement of 2026 low to high). Resistance at 17940 (21, 50 DMAs)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)