Indonesian rupiah to emerge as Asia's strongest currency in 2020 - Bloomberg

According to the latest opinion piece carried by Bloomberg on Monday, the Indonesian rupiah is likely to emerge as Asia’s beat performing currency this year, replacing the Thai baht that saw a massive lead in 2019.

Key Quotes:

“The nation’s local-currency bonds offer yields of between 5% to 8%, an alluring prospect for investors looking to put on carry trades that seek to capitalize from the difference in interest rates between two countries. 

Just as important as the yield allure has been the tolerant attitude of the central bank. Whereas policy makers generally seek to limit currency gains to support exports, Bank Indonesia said Jan. 10 it would refrain from limiting the rupiah’s strength as long as it reflected the improving economy and volatility was manageable. 

The currency extended gains into the next trading session after the United Arab Emirates said it had agreed to set aside $22.8 billion to invest in Indonesia’s sovereign wealth fund, joining Japan’s SoftBank Group Corp. and US International Development Finance Corp. in giving the nation a vote of confidence.

For the currency to finish top of the league table this year it has to outperform its peers. Here again there’s positive news. Last year’s best performers -- the Thai baht and Philippine peso -- are both facing challenges that should prevent them from replicating 2019’s gains.”