Overview

• The rupiah fell to 16,642 per US dollar on March 25, its lowest level since the Asian financial crisis in 1998, before recovering slightly after intervention.
• Bank Indonesia intervened in the spot foreign exchange, bond markets, and domestic non-deliverable forwards to stabilize the currency.
• The currency's decline is driven by global factors, including US tariffs, a strong dollar, and concerns over a potentially more hawkish Federal Reserve.
• Indonesia's fiscal challenges, such as weak state revenues and ambitious government spending plans, have raised concerns about economic stability and investor confidence.
• Foreign investors have withdrawn billions from Indonesia's stock market, exacerbating the rupiah's depreciation and contributing to broader economic instability.