Long SGD/IDR: Renewed concerns over BI independence and policy credibility

Research evidence excerpt

Long SGD/IDR: Renewed concerns over BI independence and policy credibility

Global Markets Research

27 July 2026Strategy Trade

Foreign Exchange - Asia ex-Japan

Research AnalystsLong SGD/IDR: Renewed concerns over BI

Asia FX Strategyindependence and policy credibility

Craig Chan - NSL

Raise our conviction level to 4/5 following BI Governor Warjiyo’s craig.chan@nomura.com

unexpected resignation. +65 6433 6106

Trade: We raise the conviction level on our long SGD/IDR position to 4/5 (from 3), Wee Choon Teo - NSL

targeting 14,460 (~4% gains) by end-October. weechoon.teo@nomura.com

+65 6433 6107On 24 July, we reinitiated the position by raising the conviction level to 3/5 (from 2), as

severalriskevents have come to pass. Following the shockresignation of BI governor Vicky Chen - NSL

Perry Warjiyo this morning, we further raise our conviction level on the position. vicky.chen1@nomura.com

+65 6433 6540

Rationale for our trade recommendation Manthan Shingala - NSL

1. Warjiyo’s unexpected resignation raises concerns over BI independence and manthan.shingala1@nomura.com

policy credibility. Following BI’s recent 100bpinhikes (in two months) to stabilise FX +65 6433 6427

under the helm of ex-Governor Warjiyo, there have been market concerns over

whether these hikes were the source of the rift between BI and the government which

led to Warjiyo’s resignation. Reuters (27 July) noted that BI has been under pressure

to support the President’s big-growth agenda.

Although Senior Deputy Governor Damayanti taking on the acting Governor role will

be positive for continuity in monetary policy, this might be temporary as President

Prabowo will still nominate a permanent replacement. Owing to Prabowo’s tendency

to appoint loyalists to key governmental and SOE positions (e.g., new Free Meals