Indonesian Rupiah hits the skids

Brace yourselves: there may be more pain to come for Indonesia’s rupiah.

Analysts say the currency of Southeast Asia’s biggest economy is set to breach the level of 15,000 per dollar for the first time since the depths of the Asian financial crisis in 1998. The rupiah slid as low as 14,782 Monday as the nation’s trade deficit and reliance on oil imports render it vulnerable to the emerging-market selloff triggered by financial turmoil in Turkey and Argentina.

“Fifteen thousand is the next psychological level the rupiah may breach,” said Nick Twidale, Chief operating officer at Rakuten Securities in Sydney. “Investors will be watching the central bank closely to see their next move, with rate hikes only really providing road humps in the rupiah depreciation so far.”

Indonesia’s trade deficit and reliance on oil imports are just “pummeling the rupiah,” said Stephen Innes, head of trading for the Asia Pacific at Oanda Corp. in Singapore.

Bloomberg

 

 

 

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes