Ringgit, Rupiah Are Southeast Asia's Most Volatile

The video discusses the significant influx of foreign investments into emerging market (EM) currencies, particularly focusing on Indonesian and Malaysian sovereign bonds. It highlights the risks associated with high foreign holdings, especially during economic shocks, which can lead to sudden market outflows. The potential impact of a Trump presidency on Asian currencies is analyzed, drawing parallels to past events like the 2013 quantitative easing wind-down, which caused sharp outflows and currency depreciation.

What has been the trend in foreign holdings of Indonesian and Malaysian sovereign bonds over the last decade?

• They have remained stable.

• They have decreased significantly.

• They have tripled and quadrupled, respectively.

• They have doubled in both countries.

What risk is associated with high foreign ownership of sovereign bonds in Indonesia and Malaysia?

• Increased local investment.

• Sudden outflows during market shocks.

• Higher interest rates.

• Decreased currency value.

What historical event in 2013 affected the bond markets of Malaysia and Indonesia?

• A natural disaster.

• A change in government leadership.

• The winding down of quantitative easing.

• The announcement of a new trade agreement.

How did the Rupiah react to the 2013 market shock?

• It depreciated by 21%.

• It appreciated by 10%.

• It remained stable.

• It appreciated by 21%.

What could be a potential reaction of Asian currencies to a Trump presidency?

• Increased stability.

• Severe outflows and currency depreciation.

• No significant change.

• Appreciation of the currencies.