By South China Morning Post | Created at 2025-03-26 01:41:42 | Updated at 2025-03-27 11:38:38
1 day ago
The Indonesian rupiah slumped to its lowest level in more than two decades on Tuesday, underscoring growing worries about the nation’s economic resilience amid mounting global uncertainty and apprehensions over domestic policy.
Analysts warn that the currency’s decline could signal continued volatility, urging policymakers to create a clear and coordinated strategy to alleviate investor concerns.
“Conciliatory guidance from the authorities on the fiscal situation and a growth-supportive stance might help to restore confidence in the near-term,” said DBS Bank economist Radhika Rao.
The rupiah fell as much as 0.54 per cent to 16,640 against the US dollar in morning trade on Tuesday. Its all-time low was 16,800 in June 1998, during the Asian financial crisis, according to the London Stock Exchange Group.
In response, Bank Indonesia (BI) intervened aggressively, purchasing rupiah in the spot and bond markets and entering the domestic non-deliverable forwards market. After the intervention, the currency recouped some losses, finishing the day at 16,590 per dollar.
Edi Susianto, head of monetary management at BI, stressed that the central bank had decisively stabilised the currency, describing the intervention as a “bold” effort to balance foreign exchange supply and demand.
