JAKARTA: Indonesia’s financial markets tumbled on reopening from a long holiday during which markets across the world sank in response to rising tariffs.
Indonesian stocks slumped 9.2% as markets resumed trading for the first time since March 27, triggering a 30-minute halt.
The rupiah fell 1.8% versus the dollar, closing in on a record low, while bonds slumped.
During the break, US President Donald Trump’s tariffs - and a subsequent retaliation by China - trigged a sharp selloff in risk assets, leading to a rout across Asia.
Investors have already been fretting over President Prabowo Subianto’s populist measures and the impact on economic growth. The JCI was down 8% in 2025 heading into the holiday break, and the rupiah was the worst-performing Asian currency, with a 2.8% drop against the dollar.
"The market is still digesting many policy changes,” Ari Jahja, head of Indonesia research at Macquarie Capital, wrote in a note.
"Macro remains sluggish. Tariffs will drive urgency for structural revamps and address trade surplus risk.”
Prabowo may provide some reassurance at 1pm Jakarta time, when he will deliver a speech outlining the government’s response to the turmoil, according to a statement from his office.
The government is planning to negotiate rather than retaliate, a senior minister said over the weekend.
The US is among Indonesia’s largest trading partners, and a 32% tariff is set to hit key sectors like textiles, electronics and palm oil. A delegation from Jakarta is scheduled to visit the US in coming days to negotiate on the tariffs.
Bank Indonesia intervened in the offshore non-deliverable forwards market on Monday to stabilise the rupiah, and said it was ready to respond "aggressively” in the onshore market Tuesday. - Bloomberg
