The Indonesian rupiah weakened toward IDR 17,740 per U.S. dollar in thin holiday trading on Tuesday, extending its recent decline and pulling back further from last week’s near ten-week high. Investor sentiment stayed cautious amid persistent external pressures. Indonesia’s current account deficit widened to a record USD 12.5 billion in Q2 2026, stoking concerns that elevated oil prices, resilient import demand, and softer exports could keep the external balance under strain in the near term. Markets also turned more guarded ahead of July trade figures and August inflation data due next week, while El Niño risks heightened worries over food prices. Even so, the rupiah’s losses were limited by expectations that Bank Indonesia, under acting Governor Destry Damayanti, will remain focused on currency stability after leaving its policy rate unchanged at 5.75% in August, following a cumulative 100bp of tightening since May. On the global front, the U.S. dollar steadied after recent gains, as fresh U.S. measures to curb Iran’s access to the international financial system kept geopolitical risk elevated.