Rupiah Firms Despite Fiscal Risks and Easing Bets

2026-02-25 06:54 By Farida Husna 1 min. read

The Indonesian rupiah strengthened to below IDR 16,800 per dollar on Wednesday, following a muted prior session as the dollar index slipped after U.S.

President Trump offered no shift in tariff policy during his State of the Union address.

Locally, Bank Indonesia reaffirmed its commitment to currency stability, pledging liquidity support and intervention backed by ample reserves.

The central bank has held its policy rate at 4.75% for a fifth straight meeting earlier this month, following 150bps of cuts since September 2024 amid subdued inflation.

However, the rupiah has been pinned near record lows since President Prabowo appointed his nephew as deputy governor in early February, stoking governance concerns.

Expectations of further easing, weak demand at a recent government bond auction, and skepticism over the USD 20 billion free-meals program have added to fiscal worries.

Traders also remain cautious ahead of key data next week, including February inflation and January trade figures.



News Stream
Rupiah Firms Despite Fiscal Risks and Easing Bets
The Indonesian rupiah strengthened to below IDR 16,800 per dollar on Wednesday, following a muted prior session as the dollar index slipped after U.S. President Trump offered no shift in tariff policy during his State of the Union address. Locally, Bank Indonesia reaffirmed its commitment to currency stability, pledging liquidity support and intervention backed by ample reserves. The central bank has held its policy rate at 4.75% for a fifth straight meeting earlier this month, following 150bps of cuts since September 2024 amid subdued inflation. However, the rupiah has been pinned near record lows since President Prabowo appointed his nephew as deputy governor in early February, stoking governance concerns. Expectations of further easing, weak demand at a recent government bond auction, and skepticism over the USD 20 billion free-meals program have added to fiscal worries. Traders also remain cautious ahead of key data next week, including February inflation and January trade figures.
2026-02-25
Rupiah Steady as BI Reaffirms Stability Amid Tariff Review
The Indonesian rupiah hovered around IDR 16,830 per dollar on Tuesday, little changed from the previous session, as traders weighed domestic and global developments. President Prabowo Subianto instructed officials to assess the implications of the U.S. Supreme Court’s tariff ruling, aiming to anticipate potential trade and market spillovers. Meanwhile, Bank Indonesia reaffirmed its commitment to keeping inflation within the 1-1/2%–3-1/2% target range this year while prioritizing rupiah stability through pro-market liquidity measures. Policymakers said the currency remains undervalued and pledged to step in if needed, backed by ample foreign reserves. Still, they signaled room for further easing to support growth after delivering 150 basis points of rate cuts since September 2024. Market participants await key domestic data, due next week, including February inflation and January trade figures. Globally, the dollar index firmed ahead of U.S. President Trump’s State of the Union address.
2026-02-24
Rupiah Holds Gains as Tariff Uncertainty Caps Dollar
The Indonesian rupiah strengthened for a third consecutive session on Monday, trading below 16,800 per dollar as the dollar index eased following the U.S. Supreme Court’s decision to strike down President Trump’s global tariffs. Although Trump quickly imposed a new 10% tariff, later raising it to 15%, trade policy uncertainty has done little to support the dollar. Domestically, Bank Indonesia left its policy rate unchanged last week for a fifth straight meeting at 4.75%, in line with forecasts, after cutting a total of 150bps since September 2024 amid mild inflation. Policymakers viewed the rupiah as undervalued, reaffirming their commitment to intervene, backed by ample foreign reserves. However, gains were capped by the prospects of further rate cuts this year to support growth. The economy expanded 5.11% in 2025, slightly below the 5.2% target, while Jakarta aims for 5.4% in 2026. Meantime, Indonesia’s current account swung back into deficit in Q4 2025, adding external pressure.
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