12 Dec 2013
Flash: USD/IDR at 12,000 only means back to 'fair value' - ANZ
FXstreet.com (Bali) - The Indonesian Rupiah vs US Dollar at 12,00 only takes the currency to its 'fair value', notes Khoon Goh, Senior FX Strategist at ANZ.
Key Quotes
"Despite the 18% depreciation in the Indonesian rupiah to 12,000 against the USD so far this year, we do not consider the currency as being undervalued. In fact, the 12,000 level corresponds to our PPP estimate of fair value."
" Given the need to narrow the country’s current account deficit, we look for further rupiah depreciation next year."
"We are revising our USD/IDR forecast for end 2014 to 12,200 (from 12,000 previously). Though this only factors in a mild depreciation, the risk is towards a weaker rupiah profile (ie higher in USD/IDR terms) especially in the lead-up to next year’s mid-July Presidential election."
Key Quotes
"Despite the 18% depreciation in the Indonesian rupiah to 12,000 against the USD so far this year, we do not consider the currency as being undervalued. In fact, the 12,000 level corresponds to our PPP estimate of fair value."
" Given the need to narrow the country’s current account deficit, we look for further rupiah depreciation next year."
"We are revising our USD/IDR forecast for end 2014 to 12,200 (from 12,000 previously). Though this only factors in a mild depreciation, the risk is towards a weaker rupiah profile (ie higher in USD/IDR terms) especially in the lead-up to next year’s mid-July Presidential election."