USD/IDR: BI to eventually shift its intervention level higher to 15,500 – Credit Suisse

USD/IDR has continued to push higher in tandem with US yields. Economists at Credit Suisse raise their USD/IDR forecast range to 14,800-15,500 (from 14,500-15,200) previously and expect BI to intervene as spot approaches the "red line" of 15,000.

Bank Indonesia will eventually shift its USD/IDR intervention “red line” of 15,000 

“For now, BI will likely continue to intervene as USD/IDR approaches the ‘red line’ of 15,000. However, as USD momentum continues, we eventually expect this level to break. We expect BI to eventually shift its intervention level higher to 15,500.”

“We expect BI to hike the repo rate by 25 bps (to 4.00%) on 22 September. This ‘slow tightening’ by BI leaves USD/IDR subject to upward pressure as the Fed hikes more rapidly and BI shifts its intervention levels higher. As such, we raise our USD/IDR forecast range to 14,800-15,500 (from 14,500-15,200) previously.”

See – BI Preview: Forecasts from six major banks, hiking 25 bps to contain inflation expectations