FX.co ★ Rupiah Still Soft Despite First Weekly Gain in Four

The Indonesian rupiah weakened toward IDR 16,950 per dollar on Friday, extending losses for a second consecutive session as a stronger US dollar reflected persistent geopolitical risks from the Middle East conflict and its potential spillover effects on oil prices, inflation, and global growth. Market sentiment was also guarded ahead of key domestic data releases next week, including March inflation and February trade figures.

Inflation accelerated to 4.76% in February, its fastest pace in nearly three years and above Bank Indonesia’s 1.5%–3.5% target range. At the same time, January imports jumped ahead of Ramadan and Eid al-Fitr, adding pressure on the trade balance. As a net oil and gas importer, Indonesia remains vulnerable to higher energy prices.

Even so, the rupiah managed to post its first weekly gain in four weeks, rising about 0.2%, supported by confidence in the country’s fiscal buffers to withstand near-term shocks. Officials reiterated that there would be no immediate adjustments to fuel prices or subsidy schemes, while Bank Indonesia prepares to implement new measures from April 1st aimed at curbing speculative activity in the rupiah.