Indonesian rupiah expected to outperform Asian currencies through end-2021

Indonesian rupiah

Indonesia’s currency, the rupiah, is likely poised to become Asia’s best-performing currency for the rest of the year as rising commodity prices are pushing the country’s trade surplus which reached a record of $4.74 billion in August, its 16th in a row, according to Bloomberg News.

The exporter of coal and palm oil is benefiting from a global energy crisis caused by disrupted supply chains and geopolitical tensions as the world recovers from the Covid-19 pandemic.

The rupiah rose 1.3 per cent in the third quarter 2021, even as Asian rivals weakened with rising US Treasury yields. With the nation’s foreign reserves at a record, Bank Indonesia has plenty of ammunition to support the currency if US yields rise further in coming months.

However, there are threats to the rupiah’s bid to remain at, or near the top of, Asia’s leadership board this quarter after topping it in the three months ended September. The currency’s inability to breach a technical resistance at 14,200 against the US dollar last month despite all the bullish momentum could limit more gains.

Baht and peso facing big headwinds

But many of the rupiah’s regional rivals are facing even bigger headwinds. The Thai baht has been dragged down by Thailand’s slowing economy and a growing current account deficit, while the Philippine central bank has signaled that the peso could weaken more this quarter.

The Singapore dollar’s upside, meanwhile, may be limited if the Monetary Authority of Singapore leaves its policy parameters unchanged at its upcoming monetary policy review, as is widely expected.

The Malaysian currency, the ringgit, is the one outlier that could outdo the rupiah. A high vaccination rate enabling the authorities to roll back pandemic restrictions and surging oil prices are buoying Malaysia’s growth and recovery.



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[caption id="attachment_37684" align="alignleft" width="300"] Indonesian rupiah[/caption] Indonesia’s currency, the rupiah, is likely poised to become Asia's best-performing currency for the rest of the year as rising commodity prices are pushing the country’s trade surplus which reached a record of $4.74 billion in August, its 16th in a row, according to Bloomberg News. The exporter of coal and palm oil is benefiting from a global energy crisis caused by disrupted supply chains and geopolitical tensions as the world recovers from the Covid-19 pandemic. The rupiah rose 1.3 per cent in the third quarter 2021, even as Asian rivals weakened with rising...

Indonesian rupiah

Indonesia’s currency, the rupiah, is likely poised to become Asia’s best-performing currency for the rest of the year as rising commodity prices are pushing the country’s trade surplus which reached a record of $4.74 billion in August, its 16th in a row, according to Bloomberg News.

The exporter of coal and palm oil is benefiting from a global energy crisis caused by disrupted supply chains and geopolitical tensions as the world recovers from the Covid-19 pandemic.

The rupiah rose 1.3 per cent in the third quarter 2021, even as Asian rivals weakened with rising US Treasury yields. With the nation’s foreign reserves at a record, Bank Indonesia has plenty of ammunition to support the currency if US yields rise further in coming months.

However, there are threats to the rupiah’s bid to remain at, or near the top of, Asia’s leadership board this quarter after topping it in the three months ended September. The currency’s inability to breach a technical resistance at 14,200 against the US dollar last month despite all the bullish momentum could limit more gains.

Baht and peso facing big headwinds

But many of the rupiah’s regional rivals are facing even bigger headwinds. The Thai baht has been dragged down by Thailand’s slowing economy and a growing current account deficit, while the Philippine central bank has signaled that the peso could weaken more this quarter.

The Singapore dollar’s upside, meanwhile, may be limited if the Monetary Authority of Singapore leaves its policy parameters unchanged at its upcoming monetary policy review, as is widely expected.

The Malaysian currency, the ringgit, is the one outlier that could outdo the rupiah. A high vaccination rate enabling the authorities to roll back pandemic restrictions and surging oil prices are buoying Malaysia’s growth and recovery.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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