Bank Indonesia set to intervene after rupiah depreciates to 5-year low

Bank Indonesia to Intervene in Foreign Exchange Rates as Rupiah Weakens to 5-Year Low on Trump Tariffs

On February 28, 2025, Bloomberg News reported that the Indonesian central bank pledged to intervene in the market on that date after the rupiah weakened to its lowest level in nearly five years.

Adi Susiento, Executive Director of Monetary Policy at the Bank of Indonesia, stated, “We will boldly enter the market to maintain the balance of supply and demand for foreign currency, in order to preserve market confidence. Furthermore, officials intervened on February 27, 68.”

The rupiah weakened by 0.7% to 16,568 rupiah on Friday, its lowest level since April 2563, as the United States prepared to impose tariffs on imports from Canada and Mexico next week. Asian currencies faced pressure from several factors, including increasing pressure from U.S. President Donald Trump's trade policies and uncertainty surrounding the Federal Reserve's easing cycle.

"The rupiah appears to continue trading with increased risk aversion. However, the situation remains uncertain as it's unclear whether the threat of tariffs is merely a risk or will actually materialize . "

The rupiah came under pressure in 2568 after the central bank cut its benchmark interest rate in January 2568, an unexpected move. The rupiah has lost nearly 3% this year, the worst performer among Asia's major growth currencies.

Reference: bloomberg.com

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