Korean won hits 17-year low as rupiah breaches record

South Korea’s won touched 1,539 per dollar, its weakest since 2009, while Indonesia’s rupiah breached 18,000 for the first time, now Asia’s worst-performing currency this year.tradingeconomics
Rising oil prices from the Iran conflict and capital outflows toward the stronger dollar are hammering oil-importing Asian economies, according to Reuters.reuters
Bank Indonesia vowed continued market intervention, while Seoul pledged “prompt, necessary measures” against excessive currency moves.businesstimes

Asian Currencies Under Pressure as Korea Won and Rupiah Hit Multi-Year Lows

Asian currencies came under severe strain on Thursday as the ongoing Iran conflict and elevated oil prices drove investors toward the US dollar, pushing South Korea’s won to its weakest level in 17 years and Indonesia’s rupiah past a key psychological barrier to a record low.

Won Crosses 1,500 as Seoul Pledges Action

The South Korean won crossed 1,500 per dollar on Thursday, its weakest since March 2009, with the USD/KRW pair touching as high as 1,539. The currency has lost more than 6% of its value this year as the Iran conflict drives oil prices higher and diverts capital flows away from Asia.tradingeconomics

South Korean Finance Minister Koo Yun-cheol said authorities are monitoring foreign exchange markets “with a high degree of vigilance to prevent anxiety from spreading” and vowed to take “prompt, necessary measures” against excessive moves. Data released this week showed South Korea’s inflation surged in May to its highest level in more than two years, though exports hit a record $87.75 billion, buoyed by global AI-related chip demand.tradingeconomics

Rupiah Breaches 18,000 for First Time

Indonesia’s rupiah breached 18,000 per dollar for the first time, hitting 18,047, making it Asia’s worst-performing currency with year-to-date losses exceeding 7%. The Jakarta Post reported that the selloff was driven by soaring imported oil and gas costs as Brent Crude traded around $97 a barrel, while Indonesia’s trade surplus nearly evaporated in April.thejakartapost

“The rupiah is weakening not only because the dollar is strengthening, but because markets are increasing Indonesia’s risk premium,” Bank Permata chief economist Josua Pardede told The Jakarta Post. Lawmakers also passed a bill expanding oversight of Bank Indonesia, raising concerns over central bank independence.malaymail

Bank Indonesia said it would “continue to be present in the market by optimizing all available policy instruments” to maintain stability. The central bank has deployed interventions across spot markets, domestic and offshore non-deliverable forwards, and government bond purchases.heygotrade

Broader Regional Stress

The pressure on Asian currencies reflects a broader pattern identified by analysts. BNY’s Bob Savage warned that Indonesia, the Philippines, and India face “mounting financial vulnerabilities” as rising US Treasury yields and a stronger dollar fuel capital outflows from the region. Reuters reported in May that Asian central banks have intensified interventions, depleting reserves in the process. The conflict in Iran remains the principal driver, with stalled peace talks between Tehran and Washington stoking fears of prolonged oil market disruption.reuters