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Rupiah Gains as Jokowi Leads in Indonesian General Election

Rupiah Gains as Jokowi Leads in Indonesian General Election

Daniel Dubrovsky, Contributing Senior Strategist


What's on this page

USD/IDR, Indonesian General Election Talking Points

  • Rupiah gaining as Jokowi leads in Indonesia General Election
  • Road ahead for USD/IDR eyes external risks, FX intervention
  • USD/IDR broke support, faces 2019 lows as downtrend extends

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The Rupiah is falling after Indonesian President Joko Widodo is anticipated to secure a second term following the 2019 general election. Unofficial counts have him ahead of challenger Prabowo Subianto, who had recently been closing in on Jokowi’s lead according to survey polls in the lead-up to the election. The official announcement is anticipated to be released later in May.

Overnight, as preliminary tallies crossed the wires, the iShares MSCI Indonesia ETF rallied before regional markets opened for trading on Thursday. This signaled that the Indonesian Rupiah was about to appreciate against the US Dollar on the chart below. In fact, USD/IDR tends to have an inverse relationship with the ETF, showing its sentiment-linked status.

USD/IDR, iShares MSCI Indonesia ETF

USD/IDR, iShares MSCI Indonesia ETF

Chart Created in TradingView

In the immediate sense, Jokowi appearing to secure a second term reduces the uncertainty that a Subianto victory might have entailed given what markets were pricing in. Thus, the passing of event risk bodes well for the Rupiah and volatility seems to be kept in check given what seems to be the status quo ahead. With that in mind, the road ahead for the Indonesian Rupiah is fundamentally bound to the central bank and external risks.

For the most part, the Indonesian central bank has made it clear that it intends to uphold the value of IDR and maintain price stability using FX intervention. Inflation has however been trending lower since the middle of 2017. Meanwhile, the central bank embarked on rate hikes last year to stem a selloff in the Rupiah with them now on hold. Governor Perry Warjiyo noted that they are watching external risks while on a rate pause.

USD/IDR Technical Analysis

At the time of this writing, this is appearing to look like the best week for the Indonesian Rupiah since late January. USD/IDR is attempting to clear near-term support at 14010, eyeing the current 2019 lows around 13923. Meanwhile, a falling trend line from December seems to be keeping the dominant downtrend intact. For more updates on the Indonesian Rupiah, you may follow me on Twitter here at @ddubrovskyFX.

USD/IDR Daily Chart

USD/IDR Daily Chart

Chart Created in TradingView

Indonesian Rupiah Trading Resources

--- Written by Daniel Dubrovsky, Junior Currency Analyst for

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.