On Monday, April 7, 2025, the Indonesian Rupiah came under heavy pressure on the offshore currency market, with its rate in Non-Deliverable Forward (NDF) contracts surpassing Rp17,000 per U.S. dollar. In response, Bank Indonesia (BI) conducted a currency intervention to curb the decline and stabilize the market after the holiday period.
What happened?
Amid U.S. trade tariffs announced by Donald Trump — including those targeting Indonesia — pressure intensified on emerging market currencies.
On Friday, April 4, at 8:53 PM WIB, the rupiah’s NDF rate reached Rp17,006/USD.
This marked the sharpest depreciation since the beginning of the year, with the rupiah losing 2.25% of its value in Q1 2025.
Bank Indonesia’s Response
BI intervened in the currency market to prevent panic and sharp exchange rate fluctuations.
The intervention took place before the domestic market opened following the long Lebaran holiday.
Further actions are expected, including an intervention blend — a combination of foreign exchange sales and government bond (SBN) purchases.
Context and Consequences
The rupiah’s weakening occurred amid:
➡️ Rising global tensions due to U.S. trade measures;
➡️ Capital outflows from emerging markets;
➡️ Expectations of a U.S. Federal Reserve rate hike.
Consequences include:
➡️ More expensive imports;
➡️ Potential inflationary pressure;
➡️ Increased cost of servicing external debt.
Conclusion
The breach of the psychological Rp17,000/USD mark in the NDF market highlights the rupiah’s vulnerability to external shocks. While Bank Indonesia is taking active measures to stabilize the situation, the future of the exchange rate will depend on both global developments and the resilience of the domestic economy.
Sources: market.bisnis.com
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