Indonesian Rupiah: Watching for retracement signs – OCBC

OCBC’s Sim Moh Siong and Christopher Wong report that IDR remains under pressure despite new IDX measures to address MSCI’s transparency concerns. They retain a mildly cautious bias, stressing that enforcement and foreign portfolio flows will be crucial for restoring confidence. Technically, USD/IDR shows mild bullish momentum near prior highs, with resistance and support levels framing potential retracement.

Governance steps yet to lift Rupiah

"IDR traded under pressure on Monday despite fresh measures announced by Indonesian authorities to address MSCI’s concerns over market transparency and trading practices."

"The IDX plans to include independent experts and foreign investor representatives in its oversight of stocks with concentrated ownership, step up investigations into suspected coordinated trading and freeze accounts linked to potential manipulation from November."

"Stocks with highly concentrated ownership will also be excluded from the Jakarta Composite Index from 2 November. The muted FX response suggests that investors are still waiting to see how effectively these measures are implemented."

"We retain a mildly cautious bias on IDR. BI’s policy measures may help contain near-term volatility, but they cannot fully address concerns over market governance."

"USD/IDR last closed at 18124. Mild bullish momentum on daily chart intact while RSI rose to near overbought conditions. While upside bias remains intact, we continue to look for signs of any technical turnaround as the pair approaches its prior high."

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