(Bloomberg) — The Indonesian rupiah has languished at the bottom of Asian currency rankings for most of the year but a recent overhaul of the nation’s investment law may help revive its fortunes.

The rupiah rose about 1% against the dollar last week after Indonesia approved its first omnibus law aimed at cutting red tape to boost investments and create jobs. That’s after a loss of 4.1% in the quarter ended September amid concern over Bank Indonesia’s independence, debt monetization and an economy poised for its first annual contraction since 1998.

“The passing of the omnibus labor law is good news for the rupiah as it’s a long-term structural reform that will improve the growth prospects of the economy,” said David Forrester, FX strategist at Credit Agricole CIB in Hong Kong. “We forecast USD/IDR to reach 14,500 by year end.”



graphical user interface, chart: Rupiah's 200-DMA continues to limit currency's gains


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Rupiah’s 200-DMA continues to limit currency’s gains

The rupiah, which traded at 14,700 against the dollar on Friday, has fallen 5.7% so far this year as Asia’s worst performer.

Even though the rupiah failed to breach resistance at its 200-day moving average, support near 15,000 has held in the second half of the year aided by a burgeoning trade surplus, and Bank Indonesia’s support. Not only has the central bank intervened in the currency market, it has also left rates unchanged at its last two meetings.

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Rupiah bulls will therefore be focusing on the central bank’s policy decision Tuesday, hoping that it continues to prioritize the currency’s stability over growth by keeping rates at present levels. All of the nine economists in Bloomberg’s survey forecast that BI will continue to be

By Daniel Leussink

TOKYO (Reuters) – The coronavirus pandemic is expected to lead to the slowest growth in more than 50 years in East Asia and the Pacific as well as China, while up to 38 million people are set to be pushed back into poverty, the World Bank said in an economic update on Monday.

The bank said the region this year is projected to grow by only 0.9%, the lowest rate since 1967.

Growth in China was expected to come in at 2% this year, boosted by government spending, strong exports and a low rate of new coronavirus infections since March, but held back by slow domestic consumption.

The rest of the East Asia and Pacific region was projected to see a 3.5% contraction, the World Bank said.

The pandemic and efforts to contain its spread led to a “significant curtailment” of economic activity, the report said.

“These domestic difficulties were compounded by the pandemic-induced global recession, which hit EAP (East Asia and Pacific) economies that rely on trade and tourism hard,” it said.

Countries in the region may need to pursue fiscal reform to mobilise revenue in response to the economic and financial impact from the pandemic, while social protection programmes can help support workers’ integration back into the economy, the Washington, DC-based bank said.

“Countries with well-functioning social protection programs, and good implementation infrastructure, pre-COVID, have been able to scale up more quickly during the pandemic,” it said.

The economic shock of the pandemic was also expected to lead to a jump in poverty, defined as income of $5.50 a day, the bank said, adding that based on past experience and the latest gross domestic product forecasts, poverty could expand by 33 million to 38 million people to see its first rise in 20 years.

The