JLS JPYIDR Long/Buy Med Term Exch Rate Target Zone 125.25-144.25

Historical performance and previously managed was 20 % and the estimated medium term target zone is based on monetarists' consensus, not by historical performance, and it is expected for BI to re-establish new target zone with BOJ to stabilize IDR in the market in long run.

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The previous exchange rate target zone managed by the BOJ and the BI was very risky to Indonesian economy due to the very high JPY-denominated debts by the Indonesian government and the private sector borrowers. Unless the borrowers' cash flow not in JPY-denominated cash flow, then the risk of depreciation rate on the IDR by the JPY ultimately to hammer the borrowers' financial performance.