Bank Indonesia (BI) increased the pace of policy normalisation with a 50 bps hike in September when stabilising the rupiah became a key consideration. Economists at ANZ Bank forecast USD/IDR at 15,000 by the end of the year.

Terminal policy rate pencilled in at 5.75% by Q2 2023

“We expect the policy rate to peak at 5.75% in Q2 2023, or 75 bps above our forecast for the Fed funds rate. Also, BI has been tightening rupiah liquidity, coupled with modest FX intervention, to support the currency.”

“We forecast USD/IDR at 15,000 at end-2022 and 15,100 by mid-2023.”