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23/04/26
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Dollar Hits Record High Against Rupiah Amid Risk Aversion
The US dollar extended its advance against the Indonesian rupiah for a third straight session on Thursday, pushing USD/IDR above 17,300 and setting a fresh record high in Asian trading. The move reflects a broad deterioration in risk sentiment, with investors still focused on geopolitical tensions in the Middle East and the potential economic spillovers from higher energy prices.
The rupiah remains one of the weakest-performing emerging Asian currencies this month. Market concerns center on the possibility that prolonged tensions near the Strait of Hormuz could keep crude prices elevated, adding pressure to inflation and complicating Indonesia’s external balance. At the same time, the shift toward defensive positioning has continued to support the dollar as global investors seek safer assets.
Domestic comments have done little to stabilize the currency. Bank Indonesia Deputy Governor Thomas Djiwandono said recent rupiah weakness reflects rising global uncertainty and reiterated that the central bank is working to strengthen the interest-rate structure in order to encourage foreign inflows. He also said intervention efforts would be stepped up to help steady the currency. Separate remarks from Chief Economic Minister Airlangga Hartarto, who suggested first-quarter growth could reach around 5.5% on the back of holiday-related spending and government stimulus, failed to improve sentiment toward the rupiah.
The dollar is also drawing support from expectations that the Federal Reserve may be less willing to ease policy quickly, given persistent inflation and resilient economic activity in the US. That backdrop has reduced demand for higher-risk assets and reinforced the dollar’s safe-haven appeal. Although brief hopes for progress in regional de-escalation offered some relief earlier, the absence of meaningful breakthroughs has allowed caution to return.
With fundamentals still favoring dollar strength, the upward bias in USD/IDR remains intact. Still, the pair’s rapid rise and stretched technical conditions suggest traders may become more cautious in the near term.
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