Indonesian rupiah’s 27-year low spotlights Prabowo policy concerns, global uncertainty

The decline in the currency led the central bank to intervene, stabilising the rupiah and restoring confidence

Reading Time:3 minutes

A teller counts rupiah banknotes at a money changer in Jakarta, Indonesia. Photo: Reuters

Published: 9:35am, 26 Mar 2025Updated: 12:15pm, 26 Mar 2025

Political instability in Indonesia coupled with global uncertainty over the trade war being waged by the United States contributed to Indonesia’s rupiah falling to a 27-year low, economists have said.

On Tuesday, the rupiah fell 0.54 per cent to 16,642 per US dollar in the morning trade, its deepest plunge since March 23, 2020, when it traded at 16,550 against the US dollar.

The rupiah’s worst market showing was on June 17, 1998, when it slumped to 16,800 per dollar.

The slide forced the country’s central bank, Bank Indonesia, to intervene, eventually propping the rupiah to 16,595 per US dollar when the market closed on Tuesday, a 0.24 per cent decline from Monday’s trade.

Fitra Jusdiman, director of monetary and securities asset management at the central bank, said the central bank would “continue anticipatory, mitigatory responses to ensure stability in the rupiah exchange rate”. He added that it would maintain foreign exchange supply and demand “including by intervening in a bold and measured way”.

The latest downturn had been caused by US President Donald Trump’s tariffs and tensions in the Middle East, among other events, Fitra said.