FX.co ★ Rupiah Weakness Persists on Safe-Haven Flows

The Indonesian rupiah weakened beyond IDR 16,900 per dollar on Wednesday, marking a fourth consecutive session of losses, as a stronger U.S. dollar drew safe-haven demand amid the escalating conflict in the Middle East, now in its fifth day. As a net oil and gas importer, Indonesia is exposed to rising energy prices, and elevated geopolitical risks could further pressure the rupiah while adding upside risk to inflation. Annual inflation accelerated to a 35‑month high of 4.76% in February, overshooting the 1–1/1% to 3–1/2% target range, largely due to base effects from last year’s electricity tariff discounts. Meanwhile, Bank Indonesia Governor Perry Warjiyo reiterated his confidence that inflation will remain subdued in 2026–2027, preserving room for additional policy easing after 150 bps of rate cuts since September 2024. Even so, rupiah losses were limited by the central bank’s renewed commitment to pursue bold and consistent intervention in both forward and spot markets to maintain currency stability.