JakartaGlobe-Mar 25
The Indonesian rupiah weakened to its lowest level since the 1998 financial crisis, pressured by renewed global trade tensions and investor concerns over US tariff policies under President Donald Trump. The rupiah depreciated 0.45 percent to Rp 16,611.5 per US dollar on Tuesday, extending Monday’s 0.4 percent drop. The US dollar index edged up 0.12 points to 104.3, reflecting broad strength in the greenback. Analysts cited growing concerns over Washington’s impending auto tariffs, which Trump signaled would take effect next month, with selective exemptions. “This reflects the market’s reaction to heightened trade risks,” said Ibrahim Assuaibi, a currency analyst at Laba Forexindo Berjangka. “Investors are recalibrating their positions ahead of the tariff deadline on April 2.” The rupiah’s slide draws parallels to the 1998 Asian financial crisis, when the currency plunged from about Rp 2,400 per dollar to Rp 16,500 in a matter of months, triggering economic and political turmoil in Indonesia. Today, Indonesia’s economic fundamentals and political stability remain strong despite recent widespread protests against the revision of the military law and the ‘Dark Indonesia’ demonstrations over government budget cuts and mass layoffs. Foreign exchange market analyst and Doo Financial Futures President Director Ariston Tjendra said investor confidence in the domestic stock market is also weighing on the rupiah. “Investor confidence in the domestic stock market has also put pressure on the rupiah. The market is pessimistic about domestic economic growth, which is reflected in the movement of the Indonesia Stock Exchange (IDX),” he noted in a report on Tuesday. Bank Indonesia has intervened in the foreign exchange and bond markets, deploying Domestic Non-Deliverable Forward (DNDF) contracts to manage volatility. However, investor confidence remains fragile amid uncertainty over fiscal policy and the global economic outlook. Read more at:
