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View all search resultsThe rupiah slid to a new record low of Rp 18,000 per United States dollar on Thursday, extending its losses this year to more than 7 percent and making it Asia’s worst-performing currency as rising oil prices and deteriorating trade dynamics rattled investors.
The dollar clung to its recent strength near a two-month high on Thursday as fresh Gulf hostilities sent oil prices higher and sapped risk appetite, while the Japanese yen hovered near the key 160 level that kept traders on intervention alert.
The dollar held firm near a one-week high on Thursday on a Reuters report that the United States had carried out new strikes in Iran targeting a military site, while the yen softened towards a level that triggered central bank intervention last month.
The central bank has decided to keep the BI-Rate unchanged at 4.75 percent to prevent the rupiah from spiraling ever downward amid the nearly two-month war in Iran as the currency hit a record low of Rp 17,193 per greenback on Wednesday, while experts pointed to a narrowing room for monetary policy in its aim to secure financial stability.
A de-escalation in the United States-Israeli war on Iran has helped the rupiah bounce back somewhat after approaching its historic low, but economists say the Indonesian currency remains subject to a range of risks.
The dollar headed for its biggest monthly gain since July on Tuesday and stands out as the strongest so-called safe asset as war in the Middle East has set oil prices surging, nearly everything else sinking and raised the risk of global recession.
Bank Indonesia (BI) has left its benchmark interest rate unchanged as the United States-Israel war on Iran puts pressure on the rupiah, prompting the central bank to respond with forex market intervention and tighter foreign exchange controls.
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