Jakarta's stock exchange took a battering last week and the Indonesian economy is under pressure from the global financial crisis but, ironically, the country's currency could be a good bet to outperform its neighbours in 2009.

That, at least, is the conclusion of Sebastien Barbe, a currency strategist at Calyon, who argues that closed economies are likely to fare better than open ones once the crisis peaks and the global economy slows down into next year. This should benefit the Indian rupee and the Indonesian rupiah.

It is a slightly different story in the short term, as economies deal with the immediate effects of the financial crisis. The countries best able to withstand these current stresses are those with a strong balance of payments, which has been reflected in the currency markets during the past few weeks, with the rupee and Korean won both under strong pressure.

"Korea's and India's specific vulnerability also has to do with the fact that these two economies have welcomed strong net capital inflows over the past few years; mainly bank financing in Korea and portfolio investments in India," says Barbe in a report titled: Asia under pressure û A two-fold vulnerability.

The rupee and won have come under pressure as global investors have deleveraged their portfolios and shifted into less risky assets, exposing India's and Korea's dependence on external financing. But Indonesia, the Philippines and Thailand are also "somewhat vulnerable", according to Barbe.

Indonesia's export earnings are deteriorating thanks to the correction in commodity prices; in the Philippines, remittances from overseas workers may not cover the country's trade deficit during the next few months; and Thailand's trade balance is getting worse amid the continued political uncertainty.

But as the US and Europe get closer to technical recession, it will be the most open economies that feel the effect the most û as was the case during the last financial crisis to hit Asia in 1997, when India and China survived largely unscathed.

This was neatly demonstrated last week when Singapore announced that it was expecting third-quarter GDP figures to confirm that the country is in a technical recession. The economy shrunk by more than 6% in the second quarter and the country's advance estimate puts third-quarter growth at -5.7%. To counter this rapid deceleration, the Monetary Authority of Singapore changed its currency bias to neutral from a 3% appreciation against the basket of currencies the Singapore dollar is pegged to.

If Singapore is any indicator, and Barbe thinks it is, Asia's other open economies are in for a similar deceleration ahead. "This does not bode well for Hong Kong and Malaysia," says Barbe. "Vietnam, Taiwan and Thailand also look rather vulnerable according to this criterion."

Measured by exports-to-GDP, India and Indonesia are the least open economies in the region, with a ratio of 26% for Indonesia and just 13% for India. The economies that Barbe calls "open" all have ratios of more than 60%.

These twin pressures on Asian currencies û the short-term financial stress and longer-term global economic slowdown û create an interesting trading opportunity, according to Barbe. "We expect the negative impact of the global deceleration to last even when the financial stress will have peaked," he says. "By that time, it may be interesting to play a relative outperformance of the Indian rupee and the Indonesian rupiah versus other currencies, particularly if these two currencies continue to be hit in the short term."

But, he adds, don't expect this to be on the agenda any time before 2009.