Rupiah Under Pressure as Dollar Strength Persists

2026-09-29 05:12 By Farida Husna 1 min. read

The Indonesian rupiah stayed above IDR 18,000 per U.S.

dollar on Tuesday, hovering near its weakest since early August, as a firm dollar weighed on sentiment.

The greenback held close to a two-month high on expectations of further Fed tightening, with higher energy prices adding to inflation risks.

Domestically, caution lingered ahead of August trade and September inflation data.

Annual inflation accelerated to 3.19% in August, lifted by food costs amid El Niño-related supply disruptions.

Fiscal and external risks persisted, particularly from elevated crude prices given Indonesia’s reliance on imports.

Economists warned that prolonged rupiah weakness could hurt growth by raising costs of imported inputs, energy, and capital goods.

Still, the downside was partly limited by Bank Indonesia’s interventions across offshore NDFs, domestic spot, and DNDF markets.

The board kept its benchmark rate at 5.75% last week for a third straight month after cumulative 100bp hikes between May and June.



News Stream
Rupiah Under Pressure as Dollar Strength Persists
The Indonesian rupiah stayed above IDR 18,000 per U.S. dollar on Tuesday, hovering near its weakest since early August, as a firm dollar weighed on sentiment. The greenback held close to a two-month high on expectations of further Fed tightening, with higher energy prices adding to inflation risks. Domestically, caution lingered ahead of August trade and September inflation data. Annual inflation accelerated to 3.19% in August, lifted by food costs amid El Niño-related supply disruptions. Fiscal and external risks persisted, particularly from elevated crude prices given Indonesia’s reliance on imports. Economists warned that prolonged rupiah weakness could hurt growth by raising costs of imported inputs, energy, and capital goods. Still, the downside was partly limited by Bank Indonesia’s interventions across offshore NDFs, domestic spot, and DNDF markets. The board kept its benchmark rate at 5.75% last week for a third straight month after cumulative 100bp hikes between May and June.
2026-09-29
Rupiah Weakens Ahead of Key Data Amid Firm Dollar
The Indonesian rupiah slipped past IDR 17,950 per U.S. dollar on Monday, reversing prior gains as a stronger greenback weighed on sentiment. The dollar index hovered near a two-month high, buoyed by rising oil prices that reinforced expectations of further Fed tightening and heightened geopolitical risks. Locally, caution prevailed ahead of key releases later this week, including August trade, September inflation, and manufacturing activity. Meanwhile, a central bank official said the rupiah remained under pressure from strong foreign-exchange demand among importers and continued portfolio outflows from domestic assets. Still, the weakness was capped by Bank Indonesia’s multi-market interventions spanning offshore NDFs, domestic spot, and DNDF markets. Policymakers last week kept the benchmark rate at 5.75% for a third month after cumulative 100bp hikes since May. Meanwhile, coordinated steps to contain food-price pressures continued following a recent pickup in headline inflation.
2026-09-28
Rupiah Set for Second Weekly Decline Amid Dollar Strength
The Indonesian rupiah weakened toward IDR 17,950 per U.S. dollar on Friday, extending recent losses as the dollar index hovered near a two-month peak amid expectations that the Fed may tighten policy further, with inflation concerns mounting on elevated oil prices and robust U.S. economic data. Domestically, caution prevailed ahead of August trade and September inflation reports next week, with annual inflation accelerating to 3.19% in August amid higher food costs linked to El Niño. Fiscal concerns also lingered given Indonesia’s reliance on oil imports, while officials warned that rising energy prices heightened inflation risks. Persistent FX demand from importers and capital outflows also added pressure. Earlier this week, Bank Indonesia held its benchmark rate at 5.75% for a third month following cumulative 100bp of hikes since May, while continuing FX intervention and other stabilisation steps. The rupiah was on track for a second straight weekly decline, down nearly 1% so far.
2026-09-25