Indonesia’s Currency Hits New Record Low Against US Dollar

Indonesia’s currency fell to a record low against the US dollar on Thursday, crossing the symbolic 18,000-per-dollar level as higher global energy prices and growing economic uncertainty weighed on Southeast Asia’s largest economy.

The rupiah weakened to 18,028 against the dollar despite efforts by the country's central bank to stabilise the currency through policy interventions and tighter foreign-exchange regulations.

Economists attributed the decline to increased demand for US dollars following a surge in global oil prices, which has raised import costs for energy-dependent nations. Indonesia, a net importer of oil, has been particularly vulnerable to the recent spike in crude prices.

Market sentiment has also been affected by concerns over regional trade conditions and proposed US import duties targeting dozens of economies, including several Southeast Asian countries.

Analysts said the 18,000 level carries significant psychological importance for investors and reflects mounting pressure on Indonesia’s trade balance. The country's trade surplus narrowed sharply in recent months, reducing the supply of foreign currency entering domestic markets.

In response to the currency weakness, Bank Indonesia recently raised its benchmark interest rate and introduced stricter requirements for large foreign-currency purchases. The central bank said it remains committed to maintaining stability in the financial system and ensuring sufficient liquidity in the foreign-exchange market.

Despite these measures, analysts believe continued volatility in global energy markets and external economic risks could keep pressure on the rupiah in the near term.

The latest decline has renewed concerns about the broader impact of rising energy costs on Southeast Asian economies, many of which rely heavily on imported fuel and remain sensitive to fluctuations in global commodity prices.

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