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EMERGING MARKETS-Indonesian rupiah strengthens after surprise BI rate hike
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EMERGING MARKETS-Indonesian rupiah strengthens after surprise BI rate hike
Jun 8, 2026 11:45 PM

* Rupiah firms to 18,050 a dollar

* MSCI EM Asia up around 4%, ASEAN stocks recover

* South Korean stocks jump 8%

* Indonesia's benchmark up 4.8% before midday break

* Ringgit, South Korean won appreciate

(Updates with details on Bank Indonesia's rate hike)

By Shruti Agarwal

June 9 (Reuters) - The Indonesian rupiah firmed after the central bank unexpectedly raised

interest rates on Tuesday, a week ahead of its scheduled policy meeting, as it sought to put a

floor under the free-falling currency against growing external pressures.

The rupiah appreciated to 18,050 per dollar immediately after the surprise

quarter-point rate hike, just three weeks after Bank Indonesia hiked its policy interest rate by

50 basis points.

"The move does show a sense of proactiveness in preventing any further backsliding in

sentiment," said Lavanya Venkateswaran, a senior ASEAN economist at OCBC.

"It can help stabilise sentiment at the margin. However, its sustainability will also depend

on clearer policy direction of the broader authorities to address perceived risks around recent

announcements."

Southeast Asia's biggest economy has been facing declining investor confidence over fiscal

concerns, equity market governance issues highlighted by an MSCI review, risks to central bank

autonomy, and a shifting commodity export policy.

The Jakarta Composite Index was up 4.8% at 5,599.74 points prior to the midday

break. The benchmark rose as much as 5.3% earlier in the day after tumbling around 4.5% in the

previous session.

Equities in other Asian emerging markets bounced back as investors rushed into battered

equities after Iran and Israel said they had halted attacks, with AI-linked stocks in South

Korea and Taiwan rebounding after a sharp correction on Monday.

Currencies also found support as oil prices eased: the South Korean won appreciated

to 1,511 per dollar, while the Malaysian ringgit firmed to 4.055 a dollar, recovering

from a five-month low.

The MSCI EM Asia equities index jumped 4%, reversing much of the decline

from Monday. A gauge tracking ASEAN stocks also rebounded from an eight-month

low hit in the previous session.

South Korea's benchmark KOSPI index rebounded sharply on the day, surging 8% and

triggering a sidecar mechanism within minutes of opening. The index ended more than 8% in the

red in the previous session on rising bets of U.S. rate hikes.

Chipmakers SK Hynix and Samsung Electronics ( SSNLF ) soared about 15% and 9%,

respectively.

The KOSPI, despite a 15% decline over the past three sessions, remains around 90% in the

green this year, largely driven by leveraged equity investment by retail investors, which has

topped a record 60 trillion won as of the end of May, according to a Bank of Korea report.

Equities in Taiwan gained as much as 3% on Tuesday, and are up 54% for the year. Top

contract chipmaker TSMC has advanced 49% so far this year.

In Southeast Asia, Singapore's FTSE Straits Times Index, Thailand's SET index

, and the Philippine benchmark index advanced more than 1% each, while stocks in

Malaysia erased early gains to trade flat.

Currencies were largely muted: the Philippine peso, the Singapore dollar, and

the Indian rupee inched higher, while the Thai baht slipped marginally to 32.875 a

dollar.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields at 7.313%

** Indonesia's finmin calls for synergy between fiscal and monetary policies

** Powerful Philippine quake leaves at least 32 feared dead, survivors recount fear

** China exports and imports surge in May

Asia stock indexes and currencies at 0602 GMT

COUNTRY FX FX FX INDEX STOCKS STOCKS

RIC DAILY % YTD % DAILY % YTD %

Japan +0.04 -2.16 2.14 26.17

China +0.17 +3.18 0.71 0.47

India +0.11 -6.00 0.08 -11.43

Indonesia +0.83 -7.49 4.82 -35.24

Malaysia +0.37 +0.02 0.00 -0.03

Philippines +0.20 -4.41 1.01 -1.88

S.Korea +1.07 -4.69 7.83 91.51

Singapore +0.21 +0.02 1.02 7.92

Taiwan -0.02 -0.47 2.76 54.35

Thailand +0.05 -4.15 1.29 25.58

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