Rupiah to Consolidate Before Further Gains, Citi Strategist Says
Emerging-market currencies, especially those that are high-yielding, tend to weaken for various reasons in August, said Rohit Garg, head of foreign exchange and rates strategy Asia ex-Japan for Citigroup Inc. By the end of the year, the strategist forecasts the rupiah to rally almost 2% against the dollar.
'Right now our recommendation is to stay neutral, see what happens on Aug. 1 and see how the month evolves,' said Garg, referring to US President Donald Trump's tariff deadline. 'But we are still looking at a little bit of a lower USD/IDR, closer to 16,000 than higher.' The rupiah closed at 16,311 per dollar on Monday.
The rupiah is rebounding from earlier losses in the year as concerns over a global trade war and Indonesia's fiscal policy ease. Pledges to cap the nation's budget deficit below 3% of gross domestic product and plans to tap cash reserves to cover shortfalls this year have helped calm investor nerves, Garg said.
The rupiah has also been benefiting from dollar weakness, driven by Trump-era trade tariffs and growing US fiscal deficits. Potentially softer data — especially in the labor market this summer — will boost expectations for Federal Reserve rate cuts and the 'de-dollarization' theme is likely to persist, the strategist said.
'We have been long rupiah, short dollar since the middle of April,' said Garg. 'We were expecting rupiah to appreciate a fair bit and it has, but we are expecting USD/IDR to stabilize at least for the next few weeks. And it's mostly got to do with external factors than necessarily domestic factors.'
Garg was the top forecaster for the rupiah in the second quarter, according to Bloomberg-compiled data. The ranking is based on criteria such as margin of error, timing and directional accuracy.
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Download the News18 App to stay updated! tags : India Maldives ties Maldives Mohamed Muizzu Narendra Modi view comments Location : New Delhi, India, India First Published: July 25, 2025, 14:43 IST News india India Has Always Been Maldives' Friend In Need, Be It For Infrastructure Or Health: Take A Look Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
