- Indonesian FX reserves recovered back to USD 138.8 Bn in April, alongside strong inflows into government debt.
- Rupiah’s recent strength is the product both of the Fed’s dovish stance, and Indonesia’s still-relatively narrow CAD in Q1.
- While Fed tightening is still some way off in the future, market speculations of tightening is likely to return in H2-21. Coupled with the widening CAD, this could translate to some exchange rate volatility down the road.
