Batam Island is seeing a rush of Singapore visitors after the rupiah weakened to about 14,000 per Singapore dollar in early June, with hotels filling on weekends and shoppers buying groceries in bulk.
The tourism boost follows a roughly 7% rupiah drop since late-February U.S.-Israeli strikes on Iran, which drove up energy prices and pushed the currency to 18,000 per U.S. dollar on June 4.
Bank Indonesia’s unusual 0.75-point rate increase over 20 days has failed to halt the slide, while investor concern has also been fed by uncertainty over President Prabowo Subianto’s spending plans.
In Jakarta, about 1,500 students protested on June 12 over higher gasoline prices and fiscal policy, underscoring how a currency slump helping Batam is worsening costs nationwide.
The pressure extends beyond Indonesia: India, Sri Lanka, the Philippines and Thailand have also seen their currencies weaken as Middle East conflict raises oil import bills across Asia.