Stronger-than-expected Q3 GDP growth fails to boost the Indonesian Rupiah as MUFG warns that weak portfolio flows and lingering investor sentiment concerns continue to weigh on the currency's outlook.
Q3 GDP beat at 5.47%yoy versus 5.2% consensus and 5.29% in Q2, with investment up 6.06%yoy, yet MUFG stays cautious on the Rupiah because investor confidence issues and weak portfolio flows persist. Solid growth also reduces the urgency for Bank Indonesia to support activity. The takeaway is a weaker bias for IDR despite strong data.
The 5.47%yoy Q3 growth beat expectations, but lingering investor confidence concerns and weak portfolio flows are seen constraining any sustained recovery of the currency, and robust growth lowers the urgency for Bank Indonesia to support activity.
Indonesia's Q3 GDP growth accelerated to 5.47% year-on-year, surpassing the 5.2% consensus estimate. Despite the robust economic performance, MUFG analysts maintain a cautious stance on the Indonesian Rupiah, citing persistent investor confidence issues and weak portfolio inflows as primary headwinds for the currency.
The 5.47% yoy Q3 growth beat expectations, but lingering investor confidence concerns and weak portfolio flows are seen constraining any sustained recovery of the currency, and robust growth lowers the urgency for Bank Indonesia to support activity.