FX.co ★ Rupiah Extends Losses on Risk-Off Sentiment

The Indonesian rupiah weakened to around IDR 16,850 per dollar on Monday, falling for a second consecutive session as the US dollar index strengthened on safe-haven demand amid escalating tensions in the Middle East. Bank Indonesia noted that the US strike on Iran has deepened global risk-off sentiment and pledged to remain active in the foreign exchange market to help stabilise the currency.

Fresh data showed annual inflation rising to a 35‑month high of 4.76% in February, moving above the central bank’s 1.5%–3.5% target range, largely due to base effects from last year’s electricity tariff discounts. Core inflation edged up to 2.63%, its highest level since May 2023. Meanwhile, January’s trade surplus came in below expectations as imports surged ahead of Ramadan and Eid al-Fitr.

Governor Perry Warjiyo has signalled the possibility of further policy easing, pointing to a benign inflation outlook for 2026–2027 and the need to support President Prabowo Subianto’s pro-growth agenda. At its meeting last month, the board left the benchmark rate unchanged at 4.75% for a fifth consecutive time, after a total of 150 basis points in cuts since September 2024.