FX.co ★ Rupiah Struggles Near Historic Low as External Buffers Thin

The Indonesian rupiah traded around IDR 17,020 per dollar on Wednesday, stabilizing after briefly touching a record low near IDR 17,100 in the previous session. Market sentiment remained fragile, with a sharp retreat in the US dollar index providing only modest relief after President Trump postponed a potential strike on Iran by two weeks. Domestically, Indonesia remains vulnerable to global oil price fluctuations, which continue to pose fiscal risks. Its external buffers have also eroded, with foreign exchange reserves in March falling to their lowest level in nearly two years, limiting the country’s capacity to absorb external shocks. Even so, the government in Jakarta maintained that it still has fiscal room, pointing to a “buffer” that can help manage rising energy costs. Meanwhile, Bank Indonesia reiterated that stabilizing the rupiah and containing excessive volatility remain its top priorities, noting that it has already intervened in the market and stands ready to deploy all available policy instruments. The central bank emphasized that the rupiah’s weakness is largely driven by global factors.