Rupiah Could Strengthen To 10,000: Barclays Report
The rupiah may advance to its highest level against the dollar since October in the next six months as an improving global economy spurs foreign investors to buy the nation’s assets, according to Barclays Capital.
The rupiah, the biggest gainer this month among Asia’s 10 most-active currencies outside Japan, may also appreciate on prospects President Susilo Bambang Yudhoyono will be re-elected this year following legislative elections on April 9, analysts at Barclays, the world’s third-largest currency trader, wrote in a report on Tuesday.
“Our base-case scenario, which calls for an improvement in the global macro outlook and a decline in risk aversion in the second half of 2009, may help attract capital flows to Indonesia,” Singapore-based analysts Sailesh Jha and Shyam Ramachandran said in the research note.
Indonesia’s currency will strengthen to 10,000 against the dollar in the next six months compared with a previous forecast of 15,500, the report said. It will reach 11,500 in the next three months versus a prior estimate of 14,500.
Barclays’ forecast is more bullish than the median estimate of 12,000 by the end of the third quarter in a Bloomberg News survey of 20 analysts.
On Tuesday, the currency climbed 1.9 percent to 10,900 per dollar as of 6 p.m. in Jakarta, the biggest gain since Jan. 7, Bloomberg data showed.
Yudhoyono’s Democratic Party is leading the April 9 legislative elections with 20.4 percent of the vote, according to returns so far from the Indonesian Survey Institute. That’s almost three times its tally in 2004’s election.
The Democrats’ gains may help Yudhoyono’s re-election bid in July. The president may also have better luck attracting coalition partners, enabling him to enact measures to revive economic growth. The president has seen through reforms that saw the economy expand more than 6 percent in the past two years, the fastest pace since the 1997-98 Asian financial crisis. He has instigated new laws to attract money from abroad, including tax breaks on investments.
“In our view, recent political developments are positive for the Indonesia rupiah,” the Barclays report said.
Indonesia’s economy may expand by 4 percent to 4.5 percent this year, based on encouraging growth in the first quarter, Finance Minister Sri Mulyani Indrawati said on Monday.
First-quarter growth of above 4 percent shows “some resilience” against the global slowdown, Sri Mulyani said.
The rupiah, the biggest gainer this month among Asia’s 10 most-active currencies outside Japan, may also appreciate on prospects President Susilo Bambang Yudhoyono will be re-elected this year following legislative elections on April 9, analysts at Barclays, the world’s third-largest currency trader, wrote in a report on Tuesday.
“Our base-case scenario, which calls for an improvement in the global macro outlook and a decline in risk aversion in the second half of 2009, may help attract capital flows to Indonesia,” Singapore-based analysts Sailesh Jha and Shyam Ramachandran said in the research note.
Indonesia’s currency will strengthen to 10,000 against the dollar in the next six months compared with a previous forecast of 15,500, the report said. It will reach 11,500 in the next three months versus a prior estimate of 14,500.
Barclays’ forecast is more bullish than the median estimate of 12,000 by the end of the third quarter in a Bloomberg News survey of 20 analysts.
On Tuesday, the currency climbed 1.9 percent to 10,900 per dollar as of 6 p.m. in Jakarta, the biggest gain since Jan. 7, Bloomberg data showed.
Yudhoyono’s Democratic Party is leading the April 9 legislative elections with 20.4 percent of the vote, according to returns so far from the Indonesian Survey Institute. That’s almost three times its tally in 2004’s election.
The Democrats’ gains may help Yudhoyono’s re-election bid in July. The president may also have better luck attracting coalition partners, enabling him to enact measures to revive economic growth. The president has seen through reforms that saw the economy expand more than 6 percent in the past two years, the fastest pace since the 1997-98 Asian financial crisis. He has instigated new laws to attract money from abroad, including tax breaks on investments.
“In our view, recent political developments are positive for the Indonesia rupiah,” the Barclays report said.
Indonesia’s economy may expand by 4 percent to 4.5 percent this year, based on encouraging growth in the first quarter, Finance Minister Sri Mulyani Indrawati said on Monday.
First-quarter growth of above 4 percent shows “some resilience” against the global slowdown, Sri Mulyani said.