The rupiah was repressed and closed down to around Rp17.952 per US dollar, which caused the market to start looking at the Rp18.000 level with a shorter breath, due to pressure not only coming from abroad, but also from doubts about the resilience of Indonesia's trade balance.

The strengthening of the US dollar is a major factor pressuring the region's currencies, including the rupee. The solid US economic data gives the dollar room to stay strong, especially when market players read that the world's largest economy has not yet truly lost momentum. In such situations, emerging-market assets tend to become more sensitive, as investors tend to choose instruments that are considered safer.

From the domestic side, concerns over trade performance also exacerbate sentiment. When exports are not strong enough or imports potentially increase, foreign exchange markets read the risk of a greater dollar demand.

The impact can range from import costs, to the price of industrial raw materials, to the burden of debt obligations, to the price pressure of certain consumer goods.

The rupiah has not fallen free, but the market is clearly testing how strong the domestic economy's foundation is as the dollar returns to the crown.