Fragile Sentiment Keeps Rupiah Under Pressure

2026-05-25 05:29 By Farida Husna 1 min. read

The Indonesian rupiah hovered around IDR 17,720 per U.S.

dollar on Monday, extending losses for a third session despite the dollar index easing from six-week highs.

Hopes for a U.S.–Iran deal tempered oil-driven inflation risks and reduced expectations of further Fed hikes, weighing on the safe-haven dollar.

Sentiment toward Indonesian assets stayed precarious amid persistent global headwinds, including rising U.S.

yields, elevated crude prices, and unabating capital outflows.

Locally, pressure lingered after the current account deficit in Q1 2026 widened to the deepest in over six years, underscoring external balance concerns.

Markets largely dismissed Finance Minister Purbaya Yudhi’s remarks that the rupiah could strengthen sharply to around IDR 15,000 under new rules requiring resource exporters to retain proceeds in local banks for at least 12 months.

Year-to-date, the rupiah has fallen about 6.1% against the dollar, ranking among Asia’s worst performers alongside the Indian rupee.



News Stream
Fragile Sentiment Keeps Rupiah Under Pressure
The Indonesian rupiah hovered around IDR 17,720 per U.S. dollar on Monday, extending losses for a third session despite the dollar index easing from six-week highs. Hopes for a U.S.–Iran deal tempered oil-driven inflation risks and reduced expectations of further Fed hikes, weighing on the safe-haven dollar. Sentiment toward Indonesian assets stayed precarious amid persistent global headwinds, including rising U.S. yields, elevated crude prices, and unabating capital outflows. Locally, pressure lingered after the current account deficit in Q1 2026 widened to the deepest in over six years, underscoring external balance concerns. Markets largely dismissed Finance Minister Purbaya Yudhi’s remarks that the rupiah could strengthen sharply to around IDR 15,000 under new rules requiring resource exporters to retain proceeds in local banks for at least 12 months. Year-to-date, the rupiah has fallen about 6.1% against the dollar, ranking among Asia’s worst performers alongside the Indian rupee.
2026-05-25
Rupiah Slips Further on Deepest Current Account Deficit in 6 Years
The Indonesian rupiah extended its losses on Friday, slipping past IDR 17,700 per U.S. dollar as the dollar index held near a six-week high amid elevated oil prices, sticky U.S. inflation, and rising Treasury yields. Domestic data further pressured sentiment, with the current account deficit widening to its deepest level in more than six years, underscoring concerns over Indonesia’s external balance. Pressure on the local currency has intensified since April, due to capital outflows, fiscal strains, and inflation risks tied to Middle East tensions. Bank Indonesia’s larger-than-expected rate hike earlier this week provided little relief, after policymakers warned that higher energy costs still threaten the rupiah. Meanwhile, forex reserves have dropped about USD 10 billion this year through April on continued intervention. The rupiah is set for an eighth weekly drop, down 1.4% so far and near 6% ytd, though the central bank expects stabilisation by mid-year as seasonal pressures ease.
2026-05-22
Rupiah Retreats Ahead of Q1 Current Account Data
The Indonesian rupiah slipped to around IDR 17,670 per dollar on Thursday after briefly hitting below 17,600 in the prior session, as caution set in ahead of Q1 current account data due Friday. Focus remains on Indonesia’s external balance after the current account swung into deficit in Q4, largely due to a widening oil trade gap. Support from Bank Indonesia’s larger-than-expected rate hike faded, with Governor Warjiyo warning that higher global energy costs still threaten the currency despite mild inflation. He also noted that forex reserves have fallen by about USD 10 billion this year through April due to continued intervention. The rupiah is heading for an eighth straight weekly fall, down 5.6% ytd, but policymakers expect seasonal stabilisation by mid-year. Dollar demand currently remains elevated amid dividend repatriation, debt payments, and hajj-related flows. Globally, the U.S. dollar index eased from a six-week peak on hopes for a U.S.-Iran peace deal, tempering haven demand.
2026-05-21