Mitsubishi UFJ: Energy supply disruptions and low inventory levels likely to keep the Indonesian rupiah under pressure

(1) Mitsubishi UFJ Financial Group analyst Lloyd Chan stated in a research report that, as ongoing energy supply disruptions increase the risk of fuel shortages in Indonesia, the Indonesian rupiah is expected to remain under pressure against the US dollar. (2) The senior forex analyst pointed out: "Indonesia's vulnerability is exacerbated by a relatively low crude oil inventory buffer, which is largely due to limited storage capacity." (3) However, Chan mentioned that Indonesia has secured up to 150 million barrels of Russian oil supply, which should help strengthen the country's energy supply buffer. (4) The analyst added that, in addition, Bank Indonesia has remained proactive in stabilizing the rupiah.