USD/IDR: Rupiah hangs near 4-month lows as Bank Indonesia stands pat
At its May monetary policy meeting on Thursday, Indonesia’s central bank, Bank Indonesia (BI), left its 7-day reverse repo rate unchanged at 6.00%, meeting the market expectations.
The latest Reuters poll of 20 analysts published on Tuesday showed that the Indonesian central bank, Bank Indonesia’s (BI), was seen steering the key interest rate on a steady course for the sixth straight meeting, in the wake of escalating US-China trade tensions that weighs down on the Indonesian
On the status-quo decision by the Indonesian central bank, the Indonesian Rupiah (IDR) remained unfazed and kept its range near fresh four-month lows reached against its American counterpart, with the USD/IDR cross hovering a few pips below the multi-month tops of 14,470 levels.
“Since a peak in mid-April - when unofficial vote counts showed President Joko Widodo securing a second term - the rupiah has dropped about 3 percent against the dollar, due to souring foreign investors sentiment for risky assets and a cyclical rise in dollar demand in Indonesia for offshore payments,” as cited by Reuters.
Meanwhile, the technical set up has turned in the favor of the bears, “USD/IDR’s relative strength index reporting overbought conditions for the first time since October”, as explained by FXStreet’s Analyst, Omkar Godbole.
USD/IDR Technical Levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
