Rupiah Weakness To Continue Despite BI Intervention

We hold a bearish view on the IDR over the short term. Although Bank Indonesia (BI) has been intervening heavily of late in order to maintain the IDR9,000/US$ level, we do not believe that they will be able to keep this up. Furthermore, BI's heavy intervention is a clear indication that the market has turned very bearish on the IDR, and technicals are also very weak. Despite BI's intervention, we do not see the rupiah breaking through strong trend-line resistance, and instead see it challenging short-term trend-line support before challenging longer-term support near IDR9,400/US$.

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