FX.co ★ Rupiah Edges Higher, Yet Weekly Decline Persists

The Indonesian rupiah strengthened slightly to around IDR 17,290 per dollar on Friday, recovering from a record low near 17,330 in the previous session. Nonetheless, sentiment remained fragile as broad U.S. dollar strength—driven by safe-haven demand amid stalled U.S.–Iran peace efforts—continued to weigh on emerging market currencies. Earlier this week, Bank Indonesia kept its benchmark interest rate unchanged for a seventh consecutive meeting, in line with expectations. Governor Perry Warjiyo also vowed to intensify both onshore and offshore intervention, reiterating that the rupiah is undervalued relative to its economic fundamentals. He emphasized that foreign exchange reserves of roughly USD 148 billion as of March provide an adequate buffer against external shocks. Even so, the rupiah has repeatedly touched record lows this month and is set for a fourth consecutive weekly decline. Still, modest net capital inflows into government bonds at the start of Q2 offered tentative signs of stabilization, as investors look ahead to next week’s release of Q1 foreign direct investment data for further guidance.