Asia Pacific | Stronger macro boost to rupee than rupiah and peso

The IDR and INR were the only Asian currencies that depreciated against the USD in 2020. Last year we highlighted the twin deficit risks that were intensifying for Indonesia and the negative effect on the IDR. Central bank intervention in India prevented the currency from benefitting from a current account surplus and strong portfolio inflows into equity markets.

What you will learn from this report:

• A weaker USD is expected to cause Asia’s historically ‘twin deficit’ currencies - the Indonesian rupiah (IDR), Indian rupee (INR), and Philippines peso (PHP) - to strengthen in 2021.
• INR to more than recoup its losses from 2020, the PHP to
  appreciate at a slower pace, and the IDR to strengthen slightly from last year.
• The Reserve Bank of India (RBI) to become more comfortable with rupee appreciation as an improving global backdrop supports export demand.