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View all search resultsRupiah sinks to record low, BI vows stronger intervention
The central bank said it would intensify intervention to stabilize the rupiah and ensure orderly markets while maintaining attractive yields on monetary instruments to support capital inflows.
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An employees shows rupiah and US dollar banknotes at a Bank Mandiri Syariah branch in Jakarta, in this undated photo. (Antara/Nova Wahyudi)
T
he rupiah has hit a record new low under pressure from geopolitical tensions, surging oil prices and concerns over government policies.
The currency slid to more than Rp 18,000 per United States dollar on Thursday, extending this year’s losses to more than 7 percent and making it Asia’s worst-performing currency.
Adding to the pressure, data released earlier this week showed the country’s trade surplus nearly evaporated in April on soaring prices of imported oil and gas due to a global supply crunch sparked by the US-Israeli war on Iran.
Brent crude was trading around US$97 for most of Thursday, after hostilities in the Middle East erupted anew and stalled talks between Tehran and Washington stoked fears of prolonged market disruption.
Read also: Costly oil and gas imports wipe out trade surplus
“This heightens global inflation risks and could trigger capital outflows from emerging markets, while domestic demand for foreign exchange remains elevated due to dividend repatriation and external debt payments,” Bank Indonesia (BI) senior deputy governor Destry Damayanti said in a statement on Thursday.
Foreign exchange reserves have fallen by about $10 billion so far this year, standing at $146.2 billion at the end of April.
