Indonesian Rupiah: Tentative stabilisation with key levels against US Dollar – OCBC

OCBC’s Sim Moh Siong and Christopher Wong see USD/IDR easing modestly from recent highs, helped by S&P’s rating affirmation and Bank Indonesia’s prior tightening. However, elevated Oil prices, lingering fiscal concerns and still-soft portfolio inflows limit further IDR gains. They highlight 17970/18000 as a cap, with downside supports around 17820/840.

Policy support offsets Oil headwinds

"USD/IDR has eased modestly from recent highs, with the pullback appearing to be driven more by domestic-specific factors than any meaningful weakening in the broader USD."

"S&P’s affirmation of Indonesia’s BBB rating with a stable outlook helped to ease some of the near-term concerns around the sovereign credit story, while BI’s prior tightening and continued willingness to support the IDR have also provided a firmer policy anchor. BI MPC (22 Jul) will be closely watched on whether policymakers tighten further. "

"There may also be some position adjustment after the sharp rise in USD/IDR earlier this month, although there is not yet strong evidence of a sustained pickup in foreign portfolio inflows. "

"We would therefore view the recent IDR recovery more as tentative stabilisation than the start of a stronger appreciation trend. Elevated oil prices remain a key constraint, while lingering fiscal and domestic confidence concerns may still limit the extent of IDR gains."

"USD/IDR was last at 17940 levels. Daily momentum is mild bearish while RSI shows tentative signs of rising. 2-way trades likely for now. If the pair can stay capped under 17970/18000 (21 DMA), then downside pressure may gather momentum with next support at 17820/840 levels (50 DMA, 23.6% fibo retracement of 2026 low to high). Resistance at 18020, 18140 levels."