Currency plunge comes as energy shock from the Iran war casts a cloud over Southeast Asian economies.<\/p>\n
By Agence France Presse and Reuters<\/p>\n
Published On 4 Jun 20264 Jun 2026<\/p>\n
Indonesia\u2019s rupiah has hit its weakest level ever against the US dollar, breaching the psychological 18,000 threshold amid surging energy costs.<\/p>\n
The currency hit 18,028 against the greenback on Thursday, despite recent central bank efforts to provide support.<\/p>\n
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The energy shock driven by the US-Israel war on Iran has placed a significant strain on energy-importing Southeast Asian economies, particularly Indonesia and the Philippines.<\/p>\n
The resulting pressure on trade balances has contributed to capital outflows and weaker currencies.<\/p>\n
Gulf hostilities flared again on Wednesday, sending oil prices up more than 1 percent.<\/p>\n
Adding to regional uncertainty, the United States has proposed additional import duties of 10 percent or 12.5 percent on goods from 60 economies, including Indonesia, Malaysia and Singapore, over alleged forced labour failures.<\/p>\n
Permata Bank chief economist Josua Pardede said that an exchange rate of 18,000 was a \u201cpsychological threshold\u201d for market investors.<\/p>\n
The weakening, he told\u00a0the\u00a0AFP\u00a0news agency,\u00a0was\u00a0fuelled\u00a0by high dollar demand caused by the spike in oil prices and a narrowing trade surplus.<\/p>\n
Indonesia is a net oil importer and is particularly affected by the rising crude costs, though the government insists it will leave subsidised fuel prices unchanged.<\/p>\n
The country\u2019s trade surplus has been hammered, narrowing to just $89m in April, from $3.3bn a month before, further reducing dollar supply in the Indonesian market, Josua said.<\/p>\n
\u201cDollar supply from goods trade is dwindling, while dollar needs for energy imports, raw materials, dividends, foreign debt payments and seasonality needs remain significant,\u201d he\u00a0said.<\/p>\n
\u201cThis is why the increase in the BI [Bank Indonesia] lending rate and intervention is not enough to reverse the rupiah\u2019s [depreciation].\u201d<\/p>\n
The central bank hiked rates by 0.5 basis points to 5.25 percent last month \u2013 the first increase in two years \u2013\u00a0as it looked to\u00a0stabilise\u00a0the rupiah and keep inflation in check.<\/p>\n
The central bank\u2019s spokesman, Ramdan Denny Prakoso, said on Wednesday that it continued to use \u201call available policy instruments\u201d to \u201cmaintain adequate foreign exchange liquidity\u201d.<\/p>\n
Bank Indonesia also tightened rules for dollar purchases.<\/p>\n
Since May, buyers of more than $25,000 in a given month have been required to provide supporting documents to justify their need for US currency.<\/p>\n","protected":false},"excerpt":{"rendered":"Currency plunge comes as energy shock from the Iran war casts a cloud over Southeast Asian economies. By…\n","protected":false},"author":2,"featured_media":482138,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[1668,72,1954,113,61,1665,60],"class_list":["post-482137","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-asia-pacific","tag-business","tag-business-and-economy","tag-economy","tag-ie","tag-indonesia","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/482137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=482137"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/482137\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/482138"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=482137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=482137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=482137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}