Rupiah Collapse: Dollar Hits Rp 17,000
- JAKARTA (AP) — The Indonesian rupiah has depreciated considerably against the U.S.
- according to Refinitiv data from sunday, April 6, 2025, at 8:10 a.m.
- The NDF market indicates a weaker rupiah compared to the close of regular trading before the Eid holiday on Thursday,March 27,2025,when it stood at Rp16,555 per dollar,a 0.12%...
Rupiah Weakens, NDF Market Signals Further Decline
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JAKARTA (AP) — The Indonesian rupiah has depreciated considerably against the U.S. dollar, reaching Rp17,000 in Non-Deliverable Forward (NDF) trading.
according to Refinitiv data from sunday, April 6, 2025, at 8:10 a.m. Western Indonesian Time, the rupiah’s exchange rate hit Rp17,059 per U.S.dollar. This represents a historic low for the currency.
The NDF market indicates a weaker rupiah compared to the close of regular trading before the Eid holiday on Thursday,March 27,2025,when it stood at Rp16,555 per dollar,a 0.12% gain. This suggests a potential for considerable weakening in the coming week.
Understanding the NDF Market
NDF, or Non-Deliverable Forward, is a financial instrument used to trade currencies at a predetermined exchange rate over a specific period. These markets are typically located in international financial hubs such as Singapore,Hong Kong,New York,and London,not within Indonesia itself.
The NDF market often influences psychological price formation in spot markets,with trends in NDF rates frequently mirrored in the Pasarspot.
Impact of U.S. Tariffs
Concerns are rising that Indonesia coudl be negatively affected by U.S. tariff policies, perhaps exacerbating global trade war uncertainties. the rupiah may face pressure from foreign investor capital flight and broader external economic instability.
The imposition of reciprocal tariffs, potentially as high as 32%, due to the U.S. trade deficit with Indonesia,could further harm the Indonesian economy.
These tariffs could make Indonesian goods more expensive in the U.S., potentially leading american consumers to favor domestic products. A decrease in U.S. dollar supply could then put further pressure on the rupiah’s value.
Bank Indonesia’s Response
Bank Indonesia (BI) has addressed concerns regarding the potential impact of U.S. tariffs. Ramdan Denny Prakoso, head of BI’s Communication Department, outlined the central bank’s monitoring efforts following the initial tariff declaration on april 2, 2025.
Prakoso noted that BI observed global financial market developments after the U.S. tariff announcement and China’s subsequent retaliatory tariffs on April 4, 2025. These events led to a weakening in global stock markets and a decrease in U.S. Treasury yields, reaching levels not seen since October 2024.
Prakoso, in a statement released Saturday, April 5, 2025, affirmed BI’s commitment to stabilizing the rupiah exchange rate. This will be achieved through optimizing a “triple intervention” strategy, involving interventions in the foreign exchange market on spot and DNDF transactions, as well as in the secondary market for Government Securities (SBN). The goal is to ensure sufficient foreign exchange liquidity for banking and business needs and to maintain market confidence.
Rupiah’s Slide: What You Need to Know
Q: What’s happening with the Indonesian Rupiah (IDR)?
The Indonesian rupiah has been weakening against the U.S. dollar. According to Refinitiv data from April 6, 2025, the rupiah hit a historic low in Non-Deliverable Forward (NDF) trading, reaching Rp17,059 per U.S. dollar.
Q: What is a Non-Deliverable Forward (NDF)?
An NDF, or Non-Deliverable Forward, is a financial instrument used to trade currencies. It allows participants to agree on an exchange rate for a future date without actually exchanging the currencies at that time. Settlements are made in cash based on the difference between the agreed-upon rate and the spot rate at the end of the contract. These markets are typically located in international financial hubs like Singapore, Hong Kong, New York, and London, rather than within Indonesia itself.
Q: Why is the NDF market important?
The NDF market provides a glimpse into the future. It often influences the “spot” market, where currencies are traded for immediate delivery. Trends in NDF rates are frequently enough mirrored in the spot market (Pasarspot), as described in the source material.
Q: How does the NDF market signal further decline for the rupiah?
Currently, NDF trading suggests the rupiah will continue to weaken. before the Eid holiday on March 27, 2025, the rupiah was trading at Rp16,555 per dollar. The NDF market indicates the rupiah is trading weaker now, suggesting a potential for further decline in the coming week, according to the article.
Q: What factors are contributing to the rupiah’s depreciation?
Several factors are at play, according to the article:
U.S. Tariff Policies: Concerns are rising that U.S.tariff policies could negatively affect Indonesia, potentially exacerbating global trade war uncertainties.
Capital Flight: The rupiah may face pressure from foreign investor capital flight.
External Economic Instability: Broader external economic instability could also weigh on the rupiah.
Q: How could U.S. tariffs specifically impact the rupiah?
The imposition of reciprocal tariffs, potentially as high as 32%, due to the U.S. trade deficit with Indonesia, could harm the Indonesian economy. These tariffs could make Indonesian goods more expensive in the U.S., potentially leading american consumers to favor domestic products. A decrease in U.S. dollar supply could then put further pressure on the rupiah’s value.
Q: What is Bank Indonesia (BI) doing about the situation?
Bank Indonesia (BI) is actively monitoring the situation. Ramdan Denny Prakoso,head of BI’s Communication Department,stated that BI observed global financial market developments after the U.S. tariff declaration and retaliatory tariffs from china. BI is committed to stabilizing the rupiah exchange rate through a “triple intervention” strategy involving interventions in the foreign exchange market on spot and NDF transactions, as well as in the secondary market for Goverment Securities (SBN), aiming to maintain market confidence.
Q: What is the “triple intervention” strategy mentioned by Bank Indonesia?
Bank Indonesia’s “triple intervention” strategy involves:
- Interventions in the foreign exchange market: This includes direct buying or selling of the rupiah in the spot market.
- NDF interventions: Managing expectations within the Non-Deliverable Forward market.
- Interventions in the secondary market for Government Securities (SBN): This involves buying or selling government bonds to influence market liquidity and interest rates, which can affect the rupiah.
Q: When did these events occur,according to the article?
Here’s a timeline,as per the source article:
April 2,2025: Initial US Tariff declaration.
April 4, 2025: China’s retaliatory tariffs.
April 5, 2025: Bank Indonesia announced commitment to stabilize Rupiah (statement release).
* April 6, 2025: Data from Refinitiv showing the Rupiah at historic low.
Q: what are the key takeaways from this situation?
Here is a concise summary:
| Aspect | Description |
| :————————– | :—————————————————————————————————————————————————————————————— |
| Rupiah Trend | Depreciating against the U.S. dollar, reaching historic lows in NDF trading.|
| NDF Market | Signals further weakening of the rupiah. |
| Key concerns | Rising U.S. tariffs, potential capital flight, and broader economic instability. |
| BI response | Implementing a ”triple intervention” strategy to stabilize the exchange rate. |
| Potential Impacts | Tariffs could make Indonesian goods more expensive,potentially reducing U.S. demand and impacting the rupiah’s value. |
| Market Context | Global stock markets weakened and U.S. Treasury yields decreased following US and Chinese tariffs, according to the provided article. these events started the week of April 2nd,2025. |