Indonesian Rupiah Crashes to Record Rp17,803 per Dollar as Hormuz Strikes and MSCI Cuts Spur Outflows
Updated
Updated · heygotrade.com · May 26
Indonesian Rupiah Crashes to Record Rp17,803 per Dollar as Hormuz Strikes and MSCI Cuts Spur Outflows
2 articles · Updated · heygotrade.com · May 26
Rp17,803 per dollar marked a new intraday low for the rupiah on May 26 before it steadied at Rp17,790, as traders fled to the US dollar after reported US and Israeli strikes near the Strait of Hormuz.
Brent crude rose 1.9% to $111.34 a barrel and WTI gained 2.3% to $107.84, reviving inflation and external-balance fears for Indonesia, a major oil importer.
MSCI's removal of six Indonesian stocks from its Global Standard Index added pressure by cutting Indonesia's weighting to about 0.5%-0.6% from roughly 0.8%, prompting passive foreign outflows.
The selloff spread across Asia, with the Thai baht down 0.32% and the ringgit and peso weaker, while Bank Indonesia now faces a tougher choice between defending the currency and supporting growth.
As Mideast conflict sinks its currency, can Indonesia's 'smart interventions' prevent a full-blown economic crisis?
With the yuan acting as a safe haven, is the US dollar's financial dominance in Asia finally beginning to crack?
Indonesia’s Rupiah Plunges to Historic Lows: Causes, Consequences, and the Path to Stability in 2026
Overview
In late May 2026, the Indonesian Rupiah became a central concern as it faced significant volatility and pressure, despite a modest recovery to Rp17,696 per US dollar. This persistent vulnerability led Indonesia’s central bank to affirm its commitment to market intervention, pledging to use all available monetary policy tools and actively intervene in the foreign-exchange market to reduce strain on the currency. These actions highlight the ongoing challenges facing the rupiah, as the central bank works to stabilize its value amid sustained economic pressures and a turbulent financial environment.