Indonesian Rupiah: Sentiment fails to improve despite stronger growth – MUFG

Indonesia’s Q3 GDP growth exceeded expectations at 5.47% year-on-year, according to MUFG, as stronger exports and resilient domestic demand supported the expansion. With private consumption and investment remaining robust, Bank Indonesia faces less urgency to support economic activity. Nevertheless, persistent concerns over investor confidence and weak portfolio flows are still expected to hamper a sustained recovery in the Indonesian Rupiah.

Growth Beats Expectations as FX Outlook Remains Cautious

"Indonesia’s Q3 GDP growth surprised to the upside, accelerating to 5.47%yoy from 5.29% in Q2, beating the 5.2% consensus."

"Domestic demand is holding up better than expected, with private consumption largely the same at 5.04%yoy and investment expanded 6.06%yoy."

"While stronger growth reduces the urgency for BI to support economic activity, it does little to address lingering investor confidence concerns."

"We remain cautious on IDR, with domestic risks and weak portfolio flows likely to constrain any sustained recovery."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)