Rupiah has fluctuated near 16,500/USD on Tuesday, demonstrating some slight gain after hovering around 17,000/USD on Monday, the weakest point since the 1998 Asian Financial Crisis. Rupiah has tumbled 20% against the greenback since the start of the year. At Monday’s close, it tumbled 3.85% to 16,575/USD.
Despite Indonesia’s robust economic fundamentals, analysts expected Rupiah to continue weakening amid the coronavirus pandemic. They said that the currency would take time to return to a level around 13,800 to 14,000/USD it gained in February. The outbreak had crippled the global economy, prompting investors to dump emerging market currencies. Investors were panicked when governments implemented stricter measures which include business closure and travel restrictions.
Meanwhile, the Jakarta Composite Index (JCI), the benchmark index of the Indonesia Stock Exchange (IDX), has lost 36% of its value year to date. The JCI fell 5% on Monday and 1% on Tuesday to 3,951, its lowest level since 2012.
Futures firm RFX Garuda Berjangka director Ibrahim said Rupiah’s dismal performance was a result of the government’s slow response in handling the outbreak. He urged central and regional governments to improve coordination to cope with the fast-spreading diseases.
