Indonesian corporate hedging to pick up following election
Importers will increase hedging activity irrespective of election result due to a strengthening US economy, say observers
Foreign exchange volatility has increased in the lead-up to the Indonesian presidential election on July 9, with local corporates adopting a cautious approach to hedging reserves, say market participants.
"A Jokowi win with a divided government is likely priced in by the forex markets," says Geoff Kendrick, head of Asia forex and rates strategy at Morgan Stanley in Hong Kong. "In contrast, a Prabowo win may create capital outflows, driving USD/IDR spot above 12,300. We think a Jokowi win would
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