The Rupiah is trading near Rp 14,000 per US dollar.

The Indonesian Rupiah exchange rate closed weaker on Tuesday (May 8th) by Rp 56 (0.4%) to 14,001 per US dollar. This is the first time the Rupiah has closed above Rp 14,000/USD since December 18th, 2015. As of 11:47 WIB on Wednesday (May 9th), the Rupiah was trading even weaker, down Rp 51 (0.36%) to Rp 14,051/USD. The Jakarta Interbank Spot Dollar Rate (JISDOR) reference rate even stood at Rp 14,074/USD.

Uncertainty in the global financial market, stemming from the potential for further interest rate hikes by the US Federal Reserve (The Fed), is driving up the dollar against major world currencies. This has resulted in weakening Asian currencies, including the Rupiah. The US dollar index in Asian trading on May 9th reached 93.206, a 1.17% increase from its year-end position of 92.124.

Fundamentally, the Rupiah is not experiencing any problems. Domestic economic growth remains around five percent. Inflation remains under control, with calendar year inflation (January-May) at only 1.09% and year-on-year inflation at 3.41%. Furthermore, Bank Indonesia's foreign exchange reserves at the end of April 2018 reached US$ 124.86 billion, sufficient to finance 7.4 months of imports and government foreign debt payments. This figure exceeds the international adequacy standard of approximately 3 months of imports.