- FX reserves rose to USD 137.3 Bn in July, but it increased less than expected from global bond issuance, given strong capital account pressures during the month.
- So far, USD/IDR has not deviated too much from its fundamental drivers, but real interest rate differentials are at very high levels – implying substantial headwinds against portfolio inflows in the medium-term.
- Going forward, support for USD/IDR will probably come more from the current account improvement relative to pre-pandemic levels, both of the “good” kind (more exports) and the “bad” kind (less imports).
