A recent article from the AFR.
The punchline is highlighted towards the end.
This is why I think the indo Gov will have to push for LNG exports regardless of local politics.

Asia’s central banks defend weak currencies to keep recovery on track

Asia’s central banks defend weak currencies to keep recovery on trackEmma ConnorsSouth-East Asia correspondentUpdated Oct 10, 2022 – 7.23pm,first published at 5.30pmSaveShareSingapore | Central banks across South-East Asia are working to prop up their sinking currencies, as policymakers try to shield the region’s post-COVID recovery from imported inflation in the face of a strengthening US dollar.Banks are lifting interest rates to defend currencies against capital flight and tapping reserves to pay debt.Tourists in Phuket, Thailand. The weak baht is great for exports such as tourism, but a problem for local businesses with high input costs. BloombergOfficials are also trying to prevent spooked industries from making the problem worse by hoarding US dollars instead of buying imported materials and slowing production.Aggressive, though belated, monetary tightening by the US Federal Reserve has driven the US dollar to its highest level in two decades against most currencies.The steep rise is squeezing emerging market economies that rely heavily on energy and other imports and borrow in dollars to fund them.AdvertisementWith no end in sight to the Fed’s tightening cycle, the Malaysian ringitt, the Thai baht and the Indonesian rupiah have all lost ground. Elsewhere, the Indian rupee hit a record low against the US dollar last week.Governments insist their national balance sheets are sound and banking systems strong, but weakening local currencies are stress-testing some economies.Singapore is the exception, with the city-state’s exchange-rate based monetary policy helping to prop up the local currency. The Singapore dollar has gained ground against most currencies and depreciated a relatively low 4 per cent against the US dollar this year.Nor Shamsiah Mohd Yunus, Malaysia’s central bank governor, last week urged local businesses not to “hoard or frontload” US dollar purchases, as the bank works with the private sector to rebuild the post-pandemic economy. The ringitt has fallen 10 per cent against the greenback this year, but Ms Nor Shamsiah promised to maintain liquidity in the foreign exchange market.The Bank of Thailand (BoT) is also trying to concentrate on recovery amid a growing nervousness across the country, with the baht falling 11 per cent against the dollar this year.Last month, the BoT raised its key interest rate by 25 basis points to 1 per cent. Some have pushed for higher rates, but BoT governor Sethaput Suthiwartnarueput said the economy was still getting back on its feet after COVID-19. “The Thai policy response is different from other countries as we want to ensure a smooth take-off,” Dr Sethaput said.American dollars have also become increasingly expensive in Indonesia, with the Indonesian rupiah trading above 15,000 for more than two weeks. The last time the currency was buying so little was a short-lived drop in value in April 2020, in the early panicked weeks of the pandemic.The Indonesian Business Association has warned that if the depreciation persists, rising costs of production will hinder industries that use imported materials. Although exporters such as tourism operators benefit from the current exchange rate, the association maintains that across the economy, it would be a net gain if the rate retreated to below 15,000 rupiah.Indonesia is the world’s largest coal exporter and has benefited this year from both higher prices and new markets after the European Union banned Russian coal exports in response to the Ukrainian invasion.However, the country has still had to tap foreign reserves recently to pay debt. Its ratio of foreign reserves to imports is at its lowest level in almost 10 years.Bank Indonesia began raising rates in August and is likely to have to pick up the pace, with foreign currency on the move as the Fed continues tightening.David Sumual, chief economist at Bank Central Asia in Jakarta, said the prospect of improving foreign exchange availability in the domestic economy remains limited.RELATEDStrong $US clouds outlook for emerging markets“The sizable interest rate differential between Indonesian and foreign banks causes foreign currencies to continue to escape the grip of local banks, limiting foreign exchange availability in the domestic banking system,” Mr Sumual wrote in a recent note.“Continued US monetary policy tightening reflects the depreciation riskfaced by the Indonesian rupiah, and policy rate increases to the tune of 50-100 basis points in the next three months may help Bank Indonesia in its efforts to maintain the stability of the rupiah.”