Higher energy prices and gas market stress have not yet pushed key ASEAN economies into unsustainable external deficits. Bank Indonesia (BI) is focused on defending the Indonesian Rupiah (IDR) and strengthening Indonesia’s balance of payments, while ASEAN as a region still runs a modest trade surplus.
BI’s interest rate decision was broadly in line with expectations, and it reiterated an “all-out” effort to maintain IDR stability. BI said intervention would remain targeted and that the balance of payments “must be strengthened” to limit the impact of the war.
Indonesia’s current account forecast was revised down from a deficit of 0.5% of GDP to 1.3%. The piece says emerging market net energy importers, including Indonesia’s Southeast Asian peers, may need to address balance of payments risks in central bank decisions.
Across Indonesia, Malaysia, Thailand, Vietnam, the Philippines and Singapore, the combined rolling six-month trade surplus is about $25bn. Around 60% of that surplus is attributed to Singapore.
The shortfall is described as manageable relative to reserve levels, with focus on the pace of reserve drawdown and market volatility. Reserves are presented as tools to smooth volatility, with adjustment mainly via demand measures and fiscal steps to restrain activity.
Bank Indonesia’s commitment to an “all-out” defense of the rupiah suggests a cap on currency weakness in the near term. With recent March 2026 data showing a $4 billion drop in foreign exchange reserves, it is clear they are actively selling dollars to support the Indonesian Rupiah (IDR). Derivative traders should consider selling call options on USD/IDR, as the central bank’s intervention will likely prevent the pair from breaking significantly higher than the 16,500 level it has been testing this month.
The key risk across ASEAN is not a sudden collapse but a rise in volatility as central banks use their reserves to smooth out market shocks. The latest trade figures for the ASEAN-6 show the combined surplus has narrowed to $22 billion, indicating the pressure from high energy costs is mounting. This situation makes buying straddles or strangles on pairs like the Thai baht (THB) and Philippine peso (PHP) a logical way to trade the expected price swings without betting on a specific direction.
We believe the use of foreign reserves is a short-term fix, and the real correction will have to come from slower economic activity. This is a trend that began to emerge in the second half of 2025, when fiscal restraint became a more common topic among regional policymakers. Traders should watch for any new fiscal measures designed to curb demand, as this would signal a more sustained, medium-term weakness for these currencies.
The persistence of Brent crude prices around $95 per barrel this quarter highlights the divide between the region’s energy importers and exporters. This presents a clear opportunity for a relative value trade, such as going long the Malaysian ringgit (MYR) while shorting the Indonesian rupiah (IDR). This position bets that Malaysia’s stronger balance of payments, supported by energy exports, will allow the ringgit to outperform its neighbor’s currency in the coming weeks.
