EM FX: Indonesia and Korea under pressure – BNY

BNY’s Bob Savage underscores renewed stress in parts of EM Asia, with Indonesia’s Rupiah weakening beyond 18,000 and Korean Won pressured despite a strong current account surplus. Indonesian officials push back against “Sell Indonesia” narratives, while Bank of Korea data show robust goods exports and outbound equity flows, even as KOSPI underperforms and USD strength hits EM FX.

Rupiah and Won face headwinds

"Indonesia’s Finance Minister Purbaya Yudhi Sadewa pushed back against growing market pessimism and reports of a “Sell Indonesia” trade, arguing that capital inflows into government bonds and central bank securities show investors remain confident in the economy."

"Speaking at a budget briefing, he said debt markets continued to attract foreign funds during Q2 through early June, while equity outflows had not been large enough to erase net positive flows overall."

"His comments came as Indonesian assets remained under pressure, with the rupiah weakening beyond 18,000 per dollar, and the benchmark stock index ranking among the world’s worst performers this year."

"Bank of Korea data show that South Korea’s April 2026 balance of payments remained in strong surplus."

"The current account posted a $28.29bn surplus (vs. $37.93bn in March 2026 or $4.51bn in April 2025), supported by a goods surplus of $33.88bn as exports rose 54.5% y/y to $90.59bn and imports increased 16.1% y/y to $56.70bn."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)