Indonesia IDR apprehension

There is mounting market apprehension that the ongoing IDR weakness may be protracted. The IDR outlook for 2015 remains lackluster due to tepid economic recovery and a stronger dollar.

The factors supportive of IDR include easing macroprudential measures implemented in 2011 and 2012, an improving current account balance and potential inflows from Japanese pension funds after the GPIF reform.

FX uncertainty can rise in the near term, especially going into the months when imports increase due to Ramadan, which starts in mid-June, says Bank of America.