Rupiah seen recovering ground by year-end – UOB

In UOB Group’s Quarterly Global Outlook, strategists see IDR depreciating in H1 2020 and reclaiming some poise in the second half of the year.

Key Quotes

“In the coming months, IDR remains under pressure on investors adopt a flight-to-quality approach amid an evolving COVID-19 outbreak, with USD/ IDR expected at 16,900 at 2Q20 and 17,300 at 3Q20. At the same time, BI is likely to continue with its triple intervention of spot IDR, domestic non-deliverable IDR forward and bond markets in an effort to quell market volatility”.

“Starting 4Q20, assuming that COVID-19 is brought under control globally, high real yields in Indonesian sovereign bonds may appeal to investors again when markets stabilize, spurring a recovery in the IDR. Our point forecasts are 16,500 at 4Q20 and 16,000 at 1Q21.”