USD/IDR: Room for a move to 14,700 in Q1 2022 – UOB

The Indonesian rupiah could depreciate to the 14,700 area vs. the US dollar in the first quarter of 2022, according to strategists at the Quarterly Global Outlook from UOB Group’s Global Economics & Markets Research.

Key Quotes

“Despite IDR’s resilience  in 3Q, there are still reasons to  be cautious about the IDR going forth.  These include a slow vaccination drive casting uncertainty over the economic  recovery  and  a narrowing  yield advantage of  Indonesia Government Bonds over USTs.  A  persistent and  widening  twin deficit  also  anchors  a  gradual  uptrend  in USD/IDR over the  medium term.”

“As  such, we reiterate our view of a higher USD/IDR but have moderated the trajectory in view  of current market  developments.  The  updated point forecasts at 14,600 in 4Q21, 14,700 in1Q22, 14,800 in both 2Q and 3Q22.”