Asian currencies: Indonesian rupiah hits five-month low

BENGALURU: Emerging Asian currencies fell on Tuesday, with the Indonesian rupiah extending losses to a fourth session on growing fiscal concerns, while the Indian rupee hit a new low on a proposed hike in US visa fee.

The rupee slipped 0.5 percent to hit an all-time low, pressured by the US visa fee hike, muted foreign equity inflows and a pickup in hedging.

The country’s central bank likely sold dollars via state-run banks near the 88.50 level to support the rupee before allowing it to slide further.

In Indonesia, the parliament approved President Prabowo Subianto’s budget proposal for 2026, which includes spending of 3,842.7 trillion rupiah (USD231.5 billion) and forecasts the fiscal deficit at 2.68 percent of gross domestic product.

The rupiah fell 0.4 percent to a five-month low, as investors assessed the impact of new government reforms on growth, according to Alan Lau, an FX strategist at Maybank.

Prabowo’s goal of lifting growth in Southeast Asia’s largest economy has fuelled investor fears that fiscal credibility might be compromised, potentially worsening the current account position and driving up inflation.

The central bank’s shock interest rate cut last week and threats to its autonomy have only added to the concerns.

The Thai baht, the region’s second-best performing currency this year, weakened 0.2 percent.

“On one hand, there are supportive external factors like gold prices. On the other hand, we have the government trying to limit the strength of the currency, along with the Bank of Thailand confirming it is in the market,” Maybank’s Lau said.