USD/IDR: BI to hold to avoid rupiah weakness amid growth risks – TDS
|The Bank of Indonesia (BI) is likely to hold on Thursday, July 22 amid rupiah pressures despite growth risks. According to economists at TD Securities, downside risks to IDR are set to remain in short-term.
Bank Indonesia to hold amid IDR weakness
“We expect BI to keep its 7-day reverse repo rate unchanged in line with consensus. Growth risks have clearly intensified, with COVID-19 cases increasing sharply, as the Delta variant has spread.”
“IDR looks vulnerable to further short-term pressure amid rising virus cases and growth risks. We think that avoiding the risk of fuelling IDR weakness will be a key determinant of the likely decision to keep policy on hold at this meeting.”
“We think the currency will remain on the back foot in the near term, with scope for a test of 14,600 on the cards. That said, we think pressure on IDR will be short-lived, with renewed scope for appreciation likely in the months ahead.”
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