FX.co ★ Rupiah Under Pressure After Prabowo Rebuke

The rupiah weakened toward a new low of IDR 17,500 per dollar on Tuesday, extending its slide for a fourth consecutive session as the U.S. dollar strengthened following President Trump’s warning that the Iran cease-fire was “on life support.”

Domestically, pressure intensified amid growing doubts over Bank Indonesia’s ability to defend the currency, with local media reporting that President Prabowo reprimanded Governor Perry Warjiyo over the rupiah’s prolonged weakness. Nonetheless, Prabowo backed seven Bank Indonesia measures, ranging from tighter foreign-exchange regulations and liquidity adjustments to potential reductions in limits on dollar purchases.

Underlying economic conditions also weighed on sentiment. April retail sales posted their weakest growth in nine months, consumer confidence hovered near a five-month low, and foreign-exchange reserves declined for a fourth straight month to their lowest level since mid-2024.

External risks further undermined the rupiah, with heightened Middle East tensions threatening higher energy costs, ongoing capital outflows pressuring bond and equity markets, and mounting fiscal strains leaving the currency exposed, even in the face of subdued April inflation.