Rupiah Slides to New Low as Forex Reserves Hit 2-Year Trough

2026-06-08 03:39 By Farida Husna 1 min. read

The Indonesian rupiah slipped to a fresh low of around IDR 18,150 per U.S.

dollar on Monday, marking the fifth session of weakness amid a firmer U.S.

dollar after robust US labor market data reinforced expectations of a Fed interest rate increase later this year.

Domestic strains deepened the slide after forex reserves fell for the fifth month in a row in May, hitting their lowest since June 2024 amid heavy intervention.

Traders brushed off pledges from officials and Bank Indonesia to boost yields on local assets, with sentiment fragile amid concerns over President Prabowo’s expansive spending, rising fuel subsidies tied to the Iran conflict, market transparency, and export centralization plans.

Foreign holdings of government bonds dropped to a near 20-year low as of June 2.

Governor Perry Warjiyo said Bank Indonesia would lift interest on government deposits to ease rating-agency concerns.

In May, the central bank raised the benchmark rate by 50bp to 5.25%, its first hike since 2022.



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Rupiah Slides to New Low as Forex Reserves Hit 2-Year Trough
The Indonesian rupiah slipped to a fresh low of around IDR 18,150 per U.S. dollar on Monday, marking the fifth session of weakness amid a firmer U.S. dollar after robust US labor market data reinforced expectations of a Fed interest rate increase later this year. Domestic strains deepened the slide after forex reserves fell for the fifth month in a row in May, hitting their lowest since June 2024 amid heavy intervention. Traders brushed off pledges from officials and Bank Indonesia to boost yields on local assets, with sentiment fragile amid concerns over President Prabowo’s expansive spending, rising fuel subsidies tied to the Iran conflict, market transparency, and export centralization plans. Foreign holdings of government bonds dropped to a near 20-year low as of June 2. Governor Perry Warjiyo said Bank Indonesia would lift interest on government deposits to ease rating-agency concerns. In May, the central bank raised the benchmark rate by 50bp to 5.25%, its first hike since 2022.
2026-06-08
Rupiah Set for 10th Weekly Drop 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