Indonesia’s rupiah falls to record low against US dollar

Indonesia’s rupiah has hit its weakest level ever against the US dollar, breaching the psychological 18,000 threshold amid surging energy costs.

The currency hit 18,028 against the greenback on Thursday, despite recent central bank efforts to provide support.

The energy shock driven by the US-Israel war on Iran has placed a significant strain on energy-importing Southeast Asian economies, particularly Indonesia and the Philippines.

The resulting pressure on trade balances has contributed to capital outflows and weaker currencies.

Gulf hostilities flared again on Wednesday, sending oil prices up more than 1 percent.

Adding to regional uncertainty, the United States has proposed additional import duties of 10 percent or 12.5 percent on goods from 60 economies, including Indonesia, Malaysia and Singapore, over alleged forced labour failures.

Permata Bank chief economist Josua Pardede said that an exchange rate of 18,000 was a “psychological threshold” for market investors.

The weakening, he told the AFP news agency, was fuelled by high dollar demand caused by the spike in oil prices and a narrowing trade surplus.