Indonesian corporate hedging to pick up following election

Importers will increase hedging activity amid greater rupiah volatility

indonesia-money

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 woul