Rupiah set to reclaim worst Asian currency mantle

Bloomberg | .

Indonesia’s rupiah is forecast to reclaim its position as Asia’s worst-performing currency on shrinking foreign-exchange reserves and the risk of capital outflows.

After two years in which Malaysia’s ringgit weakened the most out of the region’s major currencies, the rupiah is seen dropping 6.2 percent against the dollar from Nov. 30 to the end of 2016, twice as much as the ringgit, according to a Bloomberg survey of strategists. Indonesia’s currency declined the most among Asian emerging markets in 2012 and 2013, weakening 5.9 percent and 21 percent respectively, as commodity prices fell and tighter U.S. monetary policy triggered a flight from developing nations. 

“The Indonesian rupiah ranks highly on our scorecards in regards to capital-flow vulnerability,” said Jason Daw, the Singapore-based head of Asian foreign-exchange strategy at Societe Generale SA, the third-best forecaster of the currency in Bloomberg rankings in the last quarter.

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