The Bank Indonesia raised its benchmark seven-day repo rate by 25 basis points to 4.50%, its first hike since November 2014, after the bank's governor, Agus Martowardojo, signaled the need to take preemptive action to support the currency earlier this week.

The Indonesian rupiah rose 0.29% against the U.S. dollar to 14,052 as of 5 a.m. ET, after falling to its lowest since 2015 on May 16.

Earlier in the week, Joey Cuyegkeng, a senior economist at ING Research, noted that delaying monetary tightening to June could bring about "uncontrolled weakness" of the rupiah, which has lost as much as 5.9% in the past three-and-a-half months.

"If the depreciation continues, then inflation and inflation expectations could jump while economic growth would be at risk due to slower household spending," Cuyegkeng added.

As of May 16, US$1 was equivalent to 14,047 Indonesian rupiah.