Rupiah Set for 10th Weekly Loss as Investor Caution Deepens

2026-06-05 03:54 By Farida Husna 1 min. read

The Indonesian rupiah hovered near a record low of around IDR 18,030 per U.S.

dollar on Friday, extending losses for a fourth session as a stronger dollar and persistent uncertainty in the Middle East fueled demand for haven assets.

Domestic sentiment remained fragile amid concerns over fiscal discipline and rising government spending commitments, while worries over potential credit-rating scrutiny added to investor caution.

Official data showed foreign holdings of Indonesian government bonds fell to a near 20-year low as of June 2, while foreign ownership of domestic stocks eased to multi-year lows, underscoring weaker overseas participation in local markets.

Indonesia's forex reserves also fell by USD 2 billion in April to USD 146.2 billion, the lowest in almost two years, reflecting central bank intervention to support the currency.

For the week, the rupiah is on track for a tenth straight decline, down 0.9% and about 7.5% ytd, making it Asia's worst-performing currency in 2026.



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Rupiah Set for 10th Weekly Loss as Investor Caution Deepens
The Indonesian rupiah hovered near a record low of around IDR 18,030 per U.S. dollar on Friday, extending losses for a fourth session as a stronger dollar and persistent uncertainty in the Middle East fueled demand for haven assets. Domestic sentiment remained fragile amid concerns over fiscal discipline and rising government spending commitments, while worries over potential credit-rating scrutiny added to investor caution. Official data showed foreign holdings of Indonesian government bonds fell to a near 20-year low as of June 2, while foreign ownership of domestic stocks eased to multi-year lows, underscoring weaker overseas participation in local markets. Indonesia's forex reserves also fell by USD 2 billion in April to USD 146.2 billion, the lowest in almost two years, reflecting central bank intervention to support the currency. For the week, the rupiah is on track for a tenth straight decline, down 0.9% and about 7.5% ytd, making it Asia's worst-performing currency in 2026.
2026-06-05
Rupiah Slides to Historic Low Amid External Headwinds, Fiscal Concerns
The Indonesian rupiah weakened to a fresh record low of around IDR 18,020 per U.S. dollar on Thursday, remaining under pressure as the dollar index held near a two-month high, with stronger-than-expected US labor market data reinforcing expectations of tighter Federal Reserve policy. Domestic risks compounded the decline, with investors wary of Indonesia’s fiscal situation and speculation over a sovereign rating downgrade. Capital outflows deepened after eight local stocks were cut from the FTSE Russell index, adding to MSCI-related pressures. Meanwhile, rising oil and gas import costs eroded the trade surplus in April, while foreign reserves fell to a near two-year low in April, as Bank Indonesia stepped up intervention. The drawdown has heightened concerns over external buffers and credit risks after Fitch and Moody’s outlook revisions earlier this year. The rupiah has lost about 7.2% against the dollar year-to-date, ranking among the weakest emerging-market currencies.
2026-06-04
Rupiah Under Strain from Narrowing Trade Surplus, Inflation Risks
The Indonesian rupiah slipped toward IDR 17,930 per U.S. dollar on Wednesday, extending prior weakness and moving closer to the 18,000 mark as a firm greenback and heightened Middle East tensions boosted demand for haven assets. Meanwhile, domestic fundamentals offered little cushion, with April's trade surplus narrowing to its lowest since 2020, reducing support from export inflows. Market caution persisted despite government measures to bolster dollar liquidity via a new state-owned commodity trading firm and tighter retention rules for exporters. Reports of local banks quoting above 18,000 underscored ongoing pressure. Meanwhile, annual inflation accelerated to 3.08% in May from 2.42% in April, driven by food and transport costs. Risks remain from global energy prices and El Niño-related disruptions. Analysts expect Bank Indonesia to keep balancing rupiah stability against growth worries after its May 50bp rate hike, with imported inflation risks still significant.
2026-06-03