Indonesian Rupiah Rallies, Future Still Looks Bleak

The Indonesian rupiah rallied against the US dollar strongly, rising more than 1 percent today. Yet analysts are still worried that the future looks bleak for the currency.

The current trading environment is adverse to riskier currencies of emerging markets due to the interest rate hike from the Federal Reserve, the drop of commodities and the economic slowdown in China. Indonesian policy makers have limited ability to support the rupiah as their foreign-currency reserves runs dry. As a result, experts think that the rupiah may overtake the Malaysian ringgit as the weakest Asian currency.

USD/IDR dropped from 13,965 to 13,765 as of 14:34 GMT today.

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