Categories: Indonesia

Current Indonesian Law Led A Worst Performing Currency

WhatsAppWhatsAppFacebookFacebookTwitterTwitterPinterestPinterestRedditRedditGmailGmailShareShare

For most of the year, the Indonesian rupiah has languished at the bottom of the Asian currency rankings, but a recent revision of the investment law of the nation may help to revive its fortunes.

Last week, after Indonesia passed the first omnibus law aimed at cutting red tape to raise investments and create jobs, the rupiah rose about 1 percent against the US dollar. Meanwhile, David Forrester, forex strategist at Credit Agricole CIB in Hong Kong. The passing of the omnibus labor law is good news for the rupiah as it is a long-term structural reform that will improve the economic growth prospects.

As Asia’s worst performer, the rupiah, which traded at 14,700 against the dollar which has dropped 5.7 per cent so far this year. While the rupiah failed to break resistance at its 200-day moving average, in the second half of the year, support of close to 15,000 was provided by a burgeoning trade surplus and support from Bank Indonesia. The central bank has not only participated in the currency market, but has also held unchanged rates at its last two meetings.

Therefore, Rupiah Bulls will concentrate on Tuesday’s policy decision by the central bank, hoping that it will continue to prioritize the stability of the currency over inflation by holding rates at current levels. In Bloomberg ‘s survey, all of the nine economists expect that BI will stay on hold.

Given that 27 percent of the nation’s bonds are held by foreign investors, global risk sentiment remains a risk for rupiah appreciation. Another issue is the spread of the coronavirus, as the nation registered the most cases last week since the epidemic started. And while investors have applauded the new investment law, workers have mounted protests over concerns that their labor rights are being eroded.

Related Article: https://www.theasianaffairs.com/indonesia/2020/09/02/indonesian-rupiah-becomes-the-weakest-currency-in-asia/

WhatsAppWhatsAppFacebookFacebookTwitterTwitterPinterestPinterestRedditRedditGmailGmailShareShare
AddThis Website Tools
Noto

Jakarta-based Newswriter for The Asian Affairs. A budding newswriter that always keep track of the latest trends and news that are happening in my country Indonesia.

Recent Posts

Malaysia Mandates Stamp Duty on All Job Contracts Starting 2026

All employment contracts signed after January 1, 2026 in Malaysia will now need a stamp duty as a measure to…

June 10, 2025

Catch up the complete track list & it’s metaphor of “CRAVITY”s second album ‘Dare to Crave’

The upcoming second album ‘Dare to Crave’ and its concept video showcased the central theme of the band grapes which…

June 10, 2025

‘Ironheart’ upcoming 2025 Series: Who is ‘Ironheat’, the successor of Tony Stark?

Ahead of the global release of the mini series  ‘Ironheart’ Marvel Entertainment has released the second trailer that runs for…

June 10, 2025

“The Man of Classical Shots” Ruturaj Gaikwad to debut in the County Championship!

By signing the opportunity to play in the County Championship, the Indian opener and the skipper of CSK Ruturaj Gaikwad…

June 10, 2025

Jacky Cheung Concert 2025: All Registration Details!

The 60+ Concert Tour of outstanding Cantonese pop star Jacky Cheung in 2025 has prompted KrisFlyer to give its members…

June 10, 2025

Sri Lanka Cricket Awards 2024 Winners: Skipper Chamari dominates in all categories!

To celebrate and honor the excellent talents who are contributing to the pride of Sri Lanka Cricket team in all…

June 10, 2025