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Both currencies are poised to end in November with gains of more than 5% each, their best monthly advance since at least 2015. Both surged on Thursday as Federal Reserve Chairman Jerome Powell encouraged rising rates, easing pressures on emerging markets.
The recovery of Asia's hardest-hit emerging markets began earlier in the month as oil prices dipped, helping to reduce the current account deficit of crude importers, and optimism began to emerge. reinforce.
Commercial war between the United States and China. The rupee fell to its lowest level since October 1998, when the rupee had fallen to record lows before bouncing back.
These are "the hardest hit currencies this year and have benefited from several benefits, including the Fed's lower prices and the perception of greater transparency," said Dushyant Padmanabhan, currency strategist at Nomura Holding Inc. in Singapore.
"The drop in oil prices has also helped, along with the positive expectations for trade ahead of the G-20 Xi-Trump summit."
For the Bank of Indonesia, months of intervention and rate hikes saw a significant turnaround as they aimed to stabilize the rupee and limit capital outflows. The challenge now is to allow the currency to continue to strengthen, according to Nanang Hendarsah, executive director of monetary management at the central bank.
"Indonesian stocks and bonds are very sensitive to the rupiah movement," said Satria Sambijantoro, an economist at PT Bahana Sekuritas. "So, when they hear about Powell's dovish comments – associated with BI's strategy to allow IDR to appreciate, inflows of foreign capital are rushing."
The rupee rose 1.2% to 14,349 against a dollar to 13:05. local time, while the rupee gained 0.9% to 69.9713. Equity markets in both countries also advanced, while bond yields declined. – Bloomberg
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