FX.co ★ Rupiah Weakening Streak Persists on Geopolitical Jitters

The rupiah weakened beyond IDR 17,100 per dollar on Monday, extending its decline for a third consecutive session as the U.S. dollar strengthened following the collapse of U.S.–Iran peace talks over the weekend. Domestic indicators also underscored mounting pressure, with consumer confidence in March slipping to a five-month low and foreign exchange reserves falling to their lowest level in nearly two years.

While inflation remains within Bank Indonesia’s target range, volatile oil prices pose upside risks, further exacerbated by fiscal strains linked to President Prabowo’s flagship initiatives. According to local media, rising energy costs and the depreciating rupiah are beginning to erode margins in import‑reliant sectors such as manufacturing and transportation.

Providing some support to the currency, Bank Indonesia signaled limited room for interest rate cuts in light of heightened geopolitical uncertainty. Governor Perry Warjiyo said monetary policy is being recalibrated to prioritize stability and strengthen resilience to global shocks. Market participants are now focused on February retail sales data, scheduled for release later today.