FX.co ★ Rupiah Extends Losses for 3rd Day

The Indonesian rupiah weakened beyond IDR 16,850 per US dollar on Tuesday, declining for a third consecutive session as the greenback strengthened amid mounting concerns over a possible escalation of the US–Israel conflict involving Iran.

Domestically, Bank Indonesia indicated it remains open to additional monetary easing to back President Prabowo’s pro-growth agenda, after delivering a total of 150 basis points in rate cuts since September 2024. At the same time, the country’s trade surplus in January came in below expectations as imports jumped ahead of Ramadan and Eid al-Fitr.

The rupiah’s losses were partly limited after the central bank reiterated its commitment to containing excessive volatility through a combination of forward operations and spot market intervention.

On the inflation front, annual consumer price growth accelerated to a 35-month high of 4.76% in February, breaching the 1.5%–3.5% target band. The pickup was driven largely by base effects following electricity tariff discounts in the previous year and is projected to moderate in the coming months. Governor Perry Warjiyo has maintained that inflation will remain subdued over 2026–2027.

Investors are now awaiting the release of February foreign exchange reserve data, after reserves retreated in January from a nine-month peak.