Technical equity outflows and policy shifts weigh on the Korean Won and Indonesian Rupiah despite supportive economic indicators and softer oil prices.
The Korean Won and Indonesian Rupiah remain under pressure despite a decline in oil prices, which typically eases costs for oil-importing Asian economies. Equity outflows and technical rebalancing are overshadowing strong fundamentals for the KRW, including robust semiconductor exports and a rallying KOSPI index.
South Korea’s central bank has signaled further rate hikes, reinforcing positive economic signals. However, foreign outflows linked to concentration limits in AI-driven equity surges are creating near-term headwinds. In Indonesia, Bank Indonesia has intensified FX intervention to stabilize the Rupiah after parliament expanded its mandate to include growth and employment alongside price stability.
Finance Minister Purbaya Yudhi Sadewa dismissed concerns over the broader mandate, noting that many central banks already consider growth and jobs in policy decisions. Despite these assurances, the IDR faces ongoing volatility as markets assess the implications of the new financial sector law.