Rupiah Weakness Persists on Inflation, Domestic Pressures

2026-02-02 06:44 By Farida Husna 1 min. read

The Indonesian rupiah weakened toward IDR 16,800 per dollar on Monday, retreating for a third session as the dollar index held firm.

The greenback drew support from President Trump’s nomination of Kevin Warsh as the next Fed chair, reinforcing bets of a hawkish U.S.

policy outlook.

Locally, the rupiah remained pressured by ongoing expectations of lower rates, reflecting Bank Indonesia’s focus on growth this year after 150bp of cuts since September 2024.

Sentiment was also dampened by extended equity sell-offs after MSCI raised transparency concerns, compounded by the sudden resignation of senior financial officials.

On the data front, headline inflation rose to a near three-year high of 3.55% in January, and core inflation hit a nine-month top of 2.45%, both still within BI’s 1-1/2%–3-1/2% targets, capping urgency for tightening.

Meantime, December’s trade surplus topped forecasts as exports outpaced imports, partly limiting downside pressure on the rupiah amid resilient global demand.



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