Indonesian rupiah hits four-year low, prompts central bank intervention

THE Indonesian rupiah on Tuesday slid to its weakest in four years as the market reopened after the Eid al-Fitr holidays, prompting the central bank to intervene.

The rupiah weakened as much as 2.27 per cent to 16,200 per US dollar, its weakest level since early April 2020, leading the decline among emerging Asia currencies.

While Indonesian markets were closed for the holidays, the US dollar had gained after strong US economic data and rising inflation led markets to push out expectations for when the Federal Reserve could start cutting interest rates.

“Bank Indonesia is taking steps to maintain rupiah stability by maintaining supply-demand balance in foreign exchange market, through triple interventions,” Edi Susianto, the central bank’s head of monetary department, told Reuters.

The central bank is intervening especially through the spot and domestic non-deliverable forwards, he added, while boosting attractiveness of rupiah-denominated assets.

The benchmark stock index also weakened, dropping as much as 3.02 per cent on Tuesday, before regaining some of the losses.

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Yield of the benchmark 10-year bonds rose to 6.83 per cent, its highest since November 2023. REUTERS