FX.co ★ Rupiah Rises But Remains Asia’s Weakest Emerging Currency

The Indonesian rupiah appreciated to approximately 16,675 against the US dollar on Monday, halting eight consecutive days of depreciation as the dollar index continued its decline amidst concerns over a possible US government shutdown. President Trump and congressional leaders are scheduled to meet later today for urgent discussions, with the partial shutdown looming at 12:01 a.m. on Wednesday if no funding agreement is established. Domestically, Bank Indonesia has reiterated its determination to protect the rupiah, vowing to deploy all available measures decisively, including ongoing intervention in both onshore and offshore forward markets. Furthermore, Finance Minister Purbaya Yudhi Sadewa, who recently took over from Sri Mulyani, suggested that the currency might strengthen further, attributing this to effective coordination with the central bank. Nevertheless, the rupiah remains the weakest currency among Asian emerging markets this year, having depreciated approximately 3.6%, influenced by Bank Indonesia’s 150 basis points in rate cuts since late 2024 and the anticipation of additional easing. Political tensions have also escalated following violent protests in August.