The movements of currencies in emerging countries throughout 2026 are\nunder pressure against the US dollar. The Indian rupee and the\nIndonesian rupiah alike are struggling to strengthen amid the robustness\nof Uncle Sam\u2019s currency.<\/p>\n
This pressure is reflected in the continued strength of the US Dollar\nIndex (DXY), an index measuring the US dollar\u2019s movement against six\nmajor world currencies. When the US dollar is sought by global market\nplayers as a safe asset, the room for other countries\u2019 currencies to\nstrengthen automatically becomes more limited.<\/p>\n
For emerging countries, this situation is even heavier because they\nnot only face a dominant US dollar but also capital outflows, rising\nimport costs, and fluctuations in global energy prices.<\/p>\n
In such a situation, central banks are required to act quickly so\nthat currency weakening does not turn into greater pressure on domestic\neconomic stability.<\/p>\n
Indian Rupee<\/p>\n
According to Refinitiv data, year-to-date, the Indian rupee is under\npressure by 3.57% against the US dollar to the level of INR 93.06\/US$ at\nMonday\u2019s (6\/4\/2026) close.<\/p>\n
In fact, the Indian rupee once breached its all-time weakest level on\n27 March 2026, when it closed down 0.57% to INR 94.77\/US$.<\/p>\n
Pressure on the rupee this year also comes from various directions.\nIn addition to being driven by the strengthening US dollar, the Indian\ncurrency is also pressured by foreign fund outflows, a surge in oil\nprices due to the Iran war, and waning investor confidence.<\/p>\n
This condition makes the pressure on the rupee even heavier, as India\nis a highly sensitive energy-importing country to rises in global oil\nprices.<\/p>\n
The surge in oil prices also adds to market concerns over the\nwidening of India\u2019s current account deficit. When energy prices rise,\nimport needs increase, and demand for the US dollar also rises.<\/p>\n
At the same time, the outflow of foreign funds from the stock and\nbond markets further narrows the room for the rupee to strengthen.<\/p>\n
With the weakening trend in its exchange rate, the Reserve Bank of\nIndia (RBI) is not staying idle.<\/p>\n
Policies of the Indian Central Bank<\/p>\n
India\u2019s central bank, the Reserve Bank of India (RBI), has begun\ntaking more aggressive steps after the rupee continues to be pressured\nagainst the US dollar amid the Iran war, surging oil prices, and foreign\nfund outflows.<\/p>\n
Here are the policies taken by the RBI:<\/p>\n
Indonesian Rupiah<\/p>\n
The rupiah\u2019s exchange rate movement is not much different from the\nIndian rupee. Year-to-date, the rupiah has weakened by around 2.14% to\nRp17,030\/US$ at Monday\u2019s (6\/4\/2026) trading close. This condition places\nthe rupiah at its all-time weakest level, and it is the first time the\nGaruda\u2019s currency has closed above the psychological level of\nRp17,000\/US$.<\/p>\n
Pressure on the rupiah throughout this year is also heavily\ninfluenced by external factors. The strengthening US dollar, global oil\nprice surges, and increasing demand for safe assets amid the US-Iran war\nmake the room for rupiah strengthening very limited.<\/p>\n
On the other hand, domestic factors also add to the pressure. The\nmarket is highlighting concerns over Indonesia\u2019s fiscal prospects,\nparticularly the possibility of the state budget deficit approaching or\neven breaching the 3% limit in 2026 if oil price pressures persist.<\/p>\n
These concerns are causing market sentiment towards domestic assets\nto be pressured, thus burdening the rupiah\u2019s movement.<\/p>\n
Nevertheless, Bank Indonesia (BI) is also not staying idle. BI has\nundertaken various steps to maintain rupiah exchange rate stability,\nfrom interventions in the foreign exchange market to refinements in\nforeign exchange transaction rules to ensure US dollar demand remains\nhealthy and not driven by speculation.<\/p>\n
Here are the policies taken by BI:<\/p>\n
CNBC Indonesia Research<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/india-struggles-to-revive-the-dying-rupee-what-about-indonesia-1775609605", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }