Asian foreign exchange has stayed under pressure as a firmer US dollar coincides with still-elevated US Treasury yields and higher oil prices, weighing on several regional currencies. MUFG flags the Indian rupee, Indonesian rupiah and Thai baht as particularly exposed to renewed depreciation risk under these conditions.
India and Central Bank Measures
In India, the Reserve Bank of India’s recent FX measures aimed at curbing speculation are expected to temper downside pressure on INR, though higher crude prices remain a headwind.
Indonesia and Thailand: Sensitivity to US Dollar and Oil
Indonesia is described as vulnerable to foreign portfolio outflows as elevated US yields reduce the relative attractiveness of Indonesian assets, and MUFG reiterates an end-2026 USD/IDR forecast of 18,350. Thailand’s baht is also seen as sensitive to the stronger US dollar and costlier oil, which lift the bill for energy imports and erode the terms of trade, with MUFG maintaining its end-2026 USD/THB forecast at 34.10.
