Indonesia is taking additional steps to support the rupiah after it falls to new all-time lows against the US dollar. Bloomberg reports that Bank Indonesia pledges “smart interventions” in foreign-exchange markets, alongside tighter measures focused on how dollars are purchased. Channel NewsAsia similarly says the central bank tightens rules again on dollar-buying to help stabilize the currency. Multiple outlets describe that the tightening includes reducing the limit for cash dollar transactions without supporting documentation. Free Malaysia Today and Asia Times both report that Bank Indonesia cuts the cap for such cash purchases to US$25,000, down from higher thresholds previously in place.
Analysts cited by Channel NewsAsia suggest the current volatility does not resemble the 1998 Asian financial crisis, even though concerns about confidence and market stability are rising. Asia Times adds that the rupiah’s weakness represents a break in psychological and economic “guardrails” and notes that the currency has been weakening further in mid-May. Meanwhile, the South China Morning Post reports that Indonesian officials reassure markets that fundamentals remain sound, even as President Prabowo Subianto plays down rout fears and criticism grows as the rupiah posts continued declines.
