Two analysts at Industrial Bank say Bank Indonesia’s prioritization of
exchange-rate stability should remain a key support for the rupiah and help
gradual appreciation. Improving domestic conditions, easing liquidity stress and
firmer investor confidence also bolster the currency. Portfolio flows are the
primary catalyst; the November MSCI index review is particularly important.
Recent improvements to shareholding disclosure and free-float rules should ease
investability concerns, and foreign equity flows have begun to stabilise.
Downside risks include a stronger dollar, sustained high oil prices or an
adverse MSCI review, any of which could trigger capital outflows. Industrial
Bank projects USD/IDR at 17,600 end-Q3, 17,550 end-2026 and about 17,450 end-Q2
2027.
