Rupiah Weakness Persists on Safe-Haven Flows

2026-03-04 07:04 By Farida Husna 1 min. read

The Indonesian rupiah slid past IDR 16,900 per dollar on Wednesday, marking a fourth straight session of losses as a firmer U.S.

dollar index drew support from safe-haven demand amid an escalation of the conflict in the Middle East, now in its fifth day.

As a net oil and gas importer, Indonesia is vulnerable to rising energy prices, with heightened geopolitical risks potentially pressuring the rupiah and adding upside risks to inflation.

The annual inflation accelerated to a 35-month high of 4.76% in February, exceeding the 1-1/1%–3-1/2% target range, mainly due to base effects from last year’s electricity tariff discounts.

Meanwhile, Bank Indonesia Governor Perry Warjiyo expressed confidence that inflation will stay mild in 2026–2027, leaving room for further policy easing after 150bps of rate cuts since September 2024.

Still, losses were capped by the central bank’s renewed pledge to continue bold and consistent intervention in forward and spot markets to safeguard rupiah stability.



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