BY BEN OTTO
JAKARTA–Indonesia’s beleaguered rupiah could be facing continued pressure ahead, its fate dependent on the central bank’s ability to restore dollar liquidity and foreigners’ appetite for risk.
The rupiah is the second-worst performing currency in Asia this year, falling almost 4% year-to-date and 2.6% since May as foreign investors exited the local market amid euro zone fears.
Credit Suisse recently raised its three-month dollar forecast to IDR9,750 from IDR9,200, while Citi warned of “growing upside risk” to its year-end forecast of IDR9,350.
The dollar, which began the year below IDR9,100, was at IDR9,450 in afternoon trade in Asia on Monday.