Overview
- The rupiah fell past the psychological 18,000-per‑US‑dollar level on Thursday, marking its weakest levels ever and making it Asia’s worst-performing currency in 2026.
- Investors sold Indonesian stocks sharply, pushing the Jakarta Composite to its lowest since May 2021 and leaving the index down roughly a third so far this year.
- Bank Indonesia has responded with market intervention, tighter rules on dollar purchases and a surprise 50‑basis‑point rate hike in late May to support the currency.
- Those interventions have coincided with a drawdown in foreign‑exchange reserves, and lawmakers on Thursday passed an amendment that expands parliamentary oversight of the central bank, raising concerns about its independence.
- Markets are watching for possible MSCI reclassification and credit‑rating actions, and consumers could face higher costs if rising oil bills boost inflation or force larger fuel subsidies.