per dollar and local shares also fell as traders returned from a holiday. Bank Indonesia, the country’s central bank, has been intervening in currency and bond markets, and investors are watching whether it changes interest rates to steady confidence. India’s rupee also hit an all-time low, while Malaysia’s ringgit and other regional currencies softened – a reminder that global oil and US rate moves can outweigh local news, especially for economies that import energy or rely on foreign funding.
Why should I care?
For markets: Real yields can keep the dollar strong even if oil cools.
Higher real yields raise the payoff from holding dollar cash and US Treasuries, pulling money away from riskier assets. That helps explain why the dollar has stayed firm while emerging-market currencies have sagged. For Asia-focused stocks, bonds, or currency-hedged products, that mix can tighten financial conditions and hit the most yield-sensitive currencies first – including the rupiah and, at times, the rupee.
Zooming out: Oil shocks are a stress test for net importers.
If crude stays high, net oil-importing countries face a “double hit”: they spend more foreign currency on energy, and higher fuel costs can feed into broader inflation. That can weaken external finances and limit policy options, since easier interest rates may risk more currency pressure. Tension around the Strait of Hormuz tends to show up quickly in currencies such as the rupee and ringgit.
