17.04.202603:50:32UTC+00Rupiah Under Strains, Poised for Third Weekly Drop

The Indonesian rupiah weakened to a new low of around IDR 17,180 per dollar on Friday, extending its recent slide even as the U.S. dollar index softened amid easing U.S.–Iran tensions and reduced safe-haven demand. The currency remained under pressure, with markets largely dismissing central bank assurances that all policy tools are ready to be deployed in a measured and timely way to support the rupiah.

Sentiment continued to deteriorate ahead of next week’s policy meeting, weighed down by persistent capital outflows, elevated oil prices, fragile domestic fundamentals, and seasonal dividend repatriation. Bank Indonesia kept its benchmark interest rate unchanged at 4.75% in March for a sixth consecutive meeting, following a cumulative 150 basis-point reduction since September 2024, while foreign exchange reserves have slipped to their lowest level in nearly two years.

The rupiah is heading for a third consecutive weekly decline amid mounting concerns over fiscal risks and growth prospects, after the IMF slightly lowered its 2026 growth forecast for Indonesia. Inflation risks are also building, even though March CPI remained within the central bank’s target range.