Why the rupiah can’t recover

In Indonesia on 26/09/2013 at 5:32 am

Other Asian countries’ currencies are recovering.

The rupiah touched levels around 11,580 against the U.S. dollar Tuesday, its weakest level since April 2009, shedding around 20 percent of its value this year. The declines continued even after the country’s central bank raised rates by 150 basis points since June, including surprise rate hikes in August and September that brought rates to 7.25 percent.

One reason: “Without the depth of liquidity, it’s difficult to know the true price at the moment. I’m really looking for when we do have that liquidity coming back,” he said. “Once that happens, the currency will be better placed to stabilize, though there are still some structural issues that need to be tackled to see an improvement in the medium term outlook.”

Might want to monitor First Reit or Lippo Malls if bullish on Indonesia. Might have buying opportunities. Same with Ascendas India.


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