Indonesia’s rupiah sinks to lowest since Asian financial crisis as US tariff deadline nears
The central bank said the slump is due to global uncertainties including Trump’s reciprocal tariffs
The Indonesian rupiah pared losses after the country’s central bank intervened to prop up the currency from its weakest level since the Asian financial crisis.
The rupiah fell 0.5 per cent to 16,642 against the US dollar earlier on Tuesday, its weakest since June 1998, before narrowing the decline. The currency has slumped more than 3 per cent this year, making it one of the worst performers in emerging markets.
Bank Indonesia (BI) intervened in the spot foreign exchange, domestic non-deliverable forwards and bond markets to stabilise the rupiah, the central bank’s director for monetary management and asset securities Fitra Jusdiman said in a text message on Tuesday. The central bank intervened “boldly and measuredly” to ensure balanced FX supply and demand, and maintain confidence in the domestic market, Jusdiman wrote.
The rupiah’s weakening is mainly due to global uncertainties, including Donald Trump’s tariffs and a potentially more hawkish Federal Reserve, Jusdiman added.
“Fiscal worries will likely weigh on the currency” as well as seasonal dividend payment repatriation by foreign investors, said Moh Siong Sim, a strategist at Bank of Singapore. “Expect Bank Indonesia to continue to curb excessive rupiah volatility ahead of likely April 2 tariff announcement by the US.”