Indonesia's rupiah breached 18,000 per US dollar for the first time in nearly two months on Tuesday, as Asian currencies stayed under pressure from rising global bond yields, US-Iran tensions and higher oil prices.
The rupiah hit its lowest level since August 4 at 18,010 per dollar and stayed near the closely watched 18,000 level through the session.
The move comes amid broader weakness in regional currencies after the 10-year US Treasury yield surged to a 19-year high above 5.27% overnight, while the dollar held near a two-month high and oil prices extended gains.
Fakhrul Fulvian, chief economist at Trimegah Sekuritas Indonesia, attributed the rupiah's weakness to external factors, particularly the rise in global long-term yields.
Higher US yields typically boost the dollar's appeal against emerging-market currencies, as investors seek better returns on US assets, prompting outflows from currencies deemed riskier.
Fulvian also pointed to Bank Indonesia's "aggressive" bond-buying as a contributing factor: "if yields are kept below the level required by private investors, the adjustment can move into the currency instead."
Equities in Jakarta fell as much as 2.2% as a new minimum share price rule piled onto external pressures. A new rule from Indonesia's stock exchange slashing the minimum price at which shares can trade came into effect on Monday, with the floor falling to 1 rupiah from 50.
The reform aimed to boost liquidity and price discovery after an MSCI downgrade warning in January over transparency and investability concerns sparked a selloff that has sent the benchmark stock index down more than 30% this year.
A slate of stocks fell by more than 14%, close to the maximum limit in a single day. That list included ride-hailing firm GoTo Gojek Tokopedia, which has dropped 14% in both sessions.
Sharp declines in some stocks reflected delayed price discovery after the removal of the price floor allowed shares to trade at lower clearing prices, Fulvian said.
The benchmark index recouped some early losses and was last down 0.6% as of 0745 GMT, as major banks including Bank Rakyat Indonesia and Bank Mandiri gained over 1%.
Nearly all equity markets in the region were in negative territory, with Kuala Lumpur down about 1%, Seoul 0.3% lower and Taiwan slipping 0.8%. Singapore stocks cut earlier losses to trade 0.3% lower.
The Monetary Authority of Singapore will allocate $1.1 billion to asset managers to boost equities, it said.
Among other currencies, the Taiwan dollar weakened to 31.915 per dollar, the Philippine peso inched lower, while the Indian rupee and the Thai baht were largely flat.
HIGHLIGHTS:
** Trump denies offering Iran sanctions relief, Tehran says ready for talks
** Thai cabinet approves $37.5 billion borrowing for 2027 fiscal year
** Indonesian parliament passes 2027 state budget bill into law - Reuters
