Emerging Markets: Indonesian stocks hit 2020 lows; rupiah breaches 18,000, cenbank steps in

DBS group

04/06/2026 08:55

Rupiah hits 18,045 per dollar  
Jakarta share index tumbles 5%, at lowest since Dec 2020
JCI 2-day declines at over 7.5%
Most EM Asia stocks retreat from record close
Updates for afternoon trade
By Sneha  Kumar

    June 4 (Reuters) - Indonesian stocks plunged 5% to their lowest in more than five years on Thursday and the rupiah breached the 18,000 level, prompting central bank intervention to halt its accelerating free-fall. 
Equities in most emerging Asian markets slid from record highs on renewed fighting between the U.S. and Iran, although a ceasefire deal between Israel and Lebanon helped bring oil prices lower.
The MSCI gauge of EM Asia stocks .MIMS00000PUS fell about 2% from record highs, dragged lower by South Korea .KS11 and Taiwan .TWII equities that make up over half the index.


        
CONFIDENCE CRISIS IN INDONESIA     
The Indonesian rupiah IDR= tumbled to a record low of 18,045 per dollar on the day and held near the level despite the central bank's intervention in the foreign exchange markets. The currency has lost more than 7.5% against the dollar this year, overtaking the Indian rupee INR=IN as the region's worst performer.
The Jakarta Composite Index .JKSE sank 5% to its lowest since December 2020, extending its year-to-date decline to more than 33%, the steepest fall in emerging markets.
"A weaker rupiah raises concerns over inflation, higher funding costs, and reduced policy flexibility, prompting foreign investors to cut exposure to both equities and bonds," said Andrey Wijaya, head of research at RHB Sekuritas Indonesia.
Confidence has been dented by fiscal concerns, equity market governance issues highlighted by an MSCI review, risks to central bank autonomy and shifting commodity export policy.
"While economic growth remains relatively resilient, concerns have emerged over fiscal discipline," Wijaya said.
Data released on Tuesday showed Indonesia's trade surplus had shrunk to a six-year low in April and inflation in May moved toward the top of the target range, underscoring the country's exposure to the fallout from the Middle East conflict.
Yield on Indonesia's 10-year bond ID10YT=RR jumped to 6.780%, while the 1-year bond yield ID1YT=RR stood at 7.019%.  

   
 
PRESSURE REMAINS ON EM ASIA     
Asian assets continued to take the heat as renewed fighting in the Middle East and elevated energy prices strain energy-import dependent economies' current accounts and drive up inflation.
Stocks in Singapore .STI fell more than 1% from their record closing high clocked the previous day, with heavyweight banks DBS DBSM.SI and OCBC OCBC.SI both losing more than 1%.
Equities in the Philippines .PSI slipped 0.7%, while those in Malaysia .KLSE and Thailand .SETI advanced around 1%. 
Currencies were on the backfoot against a resilient U.S. dollar: the Malaysian ringgit MYR= depreciated to 4.014 per U.S. dollar, its weakest in two months, while the South Korean won KRW= hits its weakest level since March 2009.

      HIGHLIGHTS:    
** Indonesia passes sweeping bill expanding central bank role to spur growth
** Goldman Sachs lifts 12-month MSCI EM index forecast on AI-led gains
** TSMC boss bets big on AI growth, says he'd 'like' to hike chip prices


Asia stock indexes and currencies at 0715 GMT

            
              COUNTRY
            
          

            
              FX RIC
            
          

            
              FX DAILY %
            
          

            
              FX YTD %
            
          

            
              INDEX
            
          

            
              STOCKS DAILY %
            
          

            
              STOCKS YTD %
            
          
Japan
JPY=
+0.11
-2.01
.N225

            -1.36
          

            34.03
          
China
CNY=CFXS
+0.06
+3.14
.SSEC
-0.64
2.24
India
INR=IN
-0.05
-6.14
.NSEI
0.08
-10.35
Indonesia
IDR=
-0.55
-7.59
.JKSE
-3.53
-33.72
Malaysia
MYR=
-0.57
+1.07
.KLSE
1.00
0.55
Philippines
PHP=
+0.23
-4.49
.PSI
-0.69
-2.33
S.Korea
KRW=KFTC
-0.84
-6.03
.KS11
-1.84
105.01
Singapore
SGD=
+0.00
+0.16
.STI
-0.97
9.52
Taiwan
TWD=TP
-0.08
-0.09
.TWII
-1.68
57.71
Thailand
THB=TH
+0.14
-3.69
.SETI
1.00
27.33


Indonesian stock market's decline in 2026 https://reut.rs/4e23zkq
Indonesian rupiah's decline since the beginning of 2026 https://reut.rs/4e1hRBx
 (Reporting by Sneha Kumar in Bengaluru; additional reporting by Rae Wee in Singapore; Editing by Jacqueline Wong and Ronojoy Mazumdar)
 ((Sneha.kumar@thomsonreuters.com))