The rupiah’s movement in offshore trading became increasingly volatile and nearly touched Rp17,900 per US dollar during last night’s trading session Indonesia time, while the domestic market was closed for the Eid al-Adha holiday.

According to Bloomberg data, the rupiah briefly reached Rp17,892 per US dollar at 11:59 PM WIB in offshore trading. However, the Indonesian currency eventually closed at Rp17,886 per US dollar, weakening by 0.25%.

Today (May 28, 2026), the rupiah in the Non-Deliverable Forward (NDF) market opened flat before slightly strengthening by 0.22% to Rp17,846 per US dollar at 06:02 WIB.

Asian currencies in markets that had already opened showed mixed movements, although changes remained relatively limited. The offshore yuan strengthened slightly by 0.03%, followed by the Japanese yen, which rose 0.01%. Meanwhile, the Singapore dollar weakened marginally by 0.01% at 06:06 WIB.

Shortly afterward, Asian currencies reversed direction again at 06:50 WIB. The Japanese yen weakened 0.02%, while the Singapore dollar also declined by 0.02%.

The shift in Asian currency movements today was triggered by another increase in crude oil prices after oil had plunged more than 5% the previous day, May 27. The situation occurred as the United States and Iran had yet to reach an agreement regarding the reopening of the Strait of Hormuz, while reports also indicated new military strikes in Iran.

This morning, West Texas Intermediate (WTI) crude oil climbed close to US$90 per barrel, while Brent crude traded around US$94 per barrel. Nevertheless, oil prices remain in a downward trend as markets continue to expect that the US and Iran will at least achieve a temporary agreement despite difficult negotiations.

Rupiah and Asian Currencies

Amid ongoing geopolitical uncertainty, Asian currencies have displayed varying levels of resilience and volatility. Compared with other regional currencies over the past decade, the rupiah has been among the most volatile.

Over the last 10 years, the rupiah in the spot market moved from Rp13,788 per US dollar at the end of 2015 to Rp17,783 per US dollar during trading on Tuesday, May 26, 2026, at 10:30 WIB. As a result, the rupiah has depreciated by around 28.98% over the decade, nearly reaching 30%.

Charts show that the rupiah’s movements have been far more aggressive than those of other Asian currencies. India’s rupee, for instance, also weakened significantly. Over the same decade, it depreciated by as much as 44.13%, from INR66.153 per US dollar at the end of 2015 to INR95.347 per US dollar on May 26, 2026.

However, the rupee’s volatility has been considered more controlled than the rupiah’s due to several supporting factors. Bloomberg Survey projected India’s economy to grow 7.1% in the first quarter of 2026 and around 6.4% in the second quarter due to rising global oil prices.

In addition, India benefits from strong domestic consumption and substantial foreign exchange reserves amounting to US$728.5 billion, equivalent to 11.3 months of imports. Such reserves provide far greater room for intervention compared with Indonesia.

Bank Permata Chief Economist Josua Pardede stated that India has also implemented administrative measures to curb demand for US dollars, including raising import duties on gold and silver, as gold imports are one of the country’s major sources of dollar demand.

Josua also explained that each country’s economic structure significantly determines the behavior of its currency. This can be seen in the relative stability of the Malaysian ringgit and the Singapore dollar.

According to Josua, the stability of the Malaysian ringgit is supported by the country’s large exports of oil, gas, and crude palm oil, allowing higher commodity prices to strengthen its trade balance.

Meanwhile, Singapore possesses a highly credible exchange rate policy framework, deep financial markets, and a strategic position as an international financial hub, making the Singapore dollar relatively stable. Thailand, on the other hand, is more sensitive to energy prices, although its tourism sector provides substantial foreign exchange inflows.

Furthermore, the Philippines faces vulnerabilities similar to Indonesia due to dependence on energy imports and foreign currency needs, but these are supported by remittances from overseas workers. Vietnam, meanwhile, benefits from manufacturing exports and foreign direct investment alongside more controlled exchange rate management.

Indonesia sits somewhere in the middle, with a large domestic market and commodity resources, yet also facing high energy imports, seasonal dollar demand, and financial markets that are highly sensitive to portfolio capital flows.

The Future of the Rupiah

In Indonesia’s case, the main issue is not necessarily weak domestic economic fundamentals. Economic growth remains positive, inflation is relatively under control, and foreign exchange reserves are still considered adequate.

However, according to Josua, markets are beginning to view Indonesia’s safety buffer as narrowing. Although Indonesia’s foreign exchange reserves remain high at US$146.2 billion, equivalent to 5.8 months of imports or 5.6 months of imports plus foreign debt payments, the figure is lower than in March.

The decline in reserves was driven by foreign debt payments and efforts to stabilize the rupiah.

“This indicates that Bank Indonesia still has ammunition, but markets also see that maintaining rupiah stability comes at a cost. As a result, the rupiah may remain volatile even though economic fundamentals have not collapsed, because markets are simultaneously testing the consistency of monetary, fiscal, and external policies,” Josua explained.

Josua added that several measures could help make the rupiah more stable and less volatile.

First, Bank Indonesia cannot rely solely on interest rate hikes or foreign exchange interventions. Intervention remains necessary to ease market turbulence, but not to rigidly defend a specific exchange rate level.

Second, the government needs to strengthen sources of foreign exchange supply through improved export proceeds, accelerated value-added exports, better energy import management, and broader use of local currencies in ASEAN trade transactions.

Third, the use of local currencies in transactions among ASEAN countries should be expanded to reduce dependence on hard currencies and minimize the impact of foreign exchange volatility on imported goods prices. “This is relevant because some pressure on the rupiah comes from recurring dollar demand, not merely market sentiment,” Josua stated.

Fourth, the government should reduce factors that lead markets to assign higher risk premiums to Indonesia by maintaining policy and state budget credibility, ensuring energy subsidies are well targeted, keeping policy communication consistent, and avoiding abrupt or overly interventionist policies regarding commodity exports and foreign exchange regulations.