Jakarta. Indonesia’s rupiah slumped to its weakest level in more than two decades on Monday, weighed down by escalating global trade tensions, safe-haven demand for the US dollar, and rising geopolitical risks.

The rupiah briefly breached the Rp 17,000 level against the dollar in early trading, hitting Rp 17,217 at 9:16 a.m. Jakarta time on the spot market, according to Bloomberg data. By midday, the currency remained under pressure, trading at Rp 16,835, down 183 points or 1.1 percent from the previous close.

The decline marks the currency’s lowest level since the Asian financial crisis in 1998.

"The rupiah’s fall is largely driven by negative market reactions to the US government's new reciprocal tariff policy," said Ariston Tjendra, president director of Doo Financial Futures. “The announcement by US President Donald Trump has sparked concerns in affected countries, adding to the pressure on risk-sensitive assets.”

On April 2, US President Donald Trump announced a tariff hike under his reciprocal trade policy, raising import duties to 32 percent for Indonesia and up to 49 percent for other Southeast Asian countries, while Singapore retains the baseline 10 percent rate.

Investors are increasingly steering away from emerging market currencies amid fears that rising trade barriers could slow global growth. Safe-haven flows into the greenback have intensified, Ariston said, particularly after a stronger-than-expected US nonfarm payrolls report boosted confidence in the American economy.

The dollar also drew support from heightened geopolitical risks, with growing conflict in the Middle East and Eastern Europe. Israel has ramped up military operations in Gaza, while the US has launched strikes in Yemen. In Europe, tensions between Russia and Ukraine continue to escalate.

“These developments are eroding market confidence,” Tjendra said. “If trade negotiations show signs of moderation on Trump’s part, there could be room for a rebound in risk assets, including the rupiah.”