Monday, June 15, 2015

Maybank FX Flash: IDR - Currency Measures Impact Limited In Near Term - 11 Jun 2015




IDR: Currency Measures Impact Limited In Near Term


*         The BI has introduced various regulations recently, including rules on the use of the IDR for onshore transactions, to ensure market liquidity and efficiency.
*         In the medium- to longer-terms, these regulations would work to benefit the Indonesian economy and stabilize the economy and prevent its dollarization. These measures should not only help to alleviate the demand for dollar but at the same time, ensure sufficient dollar liquidity to stem spikes in dollar demand.
*         However, in the near term, these measures might not have the intended impact as the daily transactions do not look significant. As well, weak domestic macroeconomic fundamentals and the possibility of portfolio outflows resulting from widening real yields should keep the IDR elevated in the quarters ahead.


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