USD/IDR: Next target for the Rupiah bears will be March 2020 high of 16,625 – SocGen

The Indonesian Rupiah is the worst-performing currency in Asia this month. Economists at Société Générale analyze IDR outlook. 

BI to stand pat at 5.75%

We expect Bank Indonesia to stand pat at 5.75%. Headline inflation has slowed to 2.3% (BI target 2-4%), but the central bank has abstained from policy easing due to IDR weakness. Our house view is that the next rate move will be a cut in 1Q24 or later.

The Rupiah has weakened to a level last seen during the peak pandemic as USD/IDR breached the December 2022 high of 15,770 and next target for the Rupiah bears will be March 2020 high of 16,625.