FX.co ★ Rupiah Firms Ahead of BI Rate Call

The Indonesian rupiah extended its advance for a second consecutive session on Wednesday, trading around IDR 17,900 per U.S. dollar despite broad-based dollar strength, as investors awaited Bank Indonesia’s policy decision. The central bank is widely expected to raise its benchmark interest rate by 25 basis points to 6.0%, following a cumulative 100-basis-point tightening in May–June aimed at supporting the currency.

In parallel, Finance Minister Purbaya Yudhi highlighted Indonesia’s fiscal resilience, pointing to a stable sovereign outlook and a manageable fiscal deficit. Authorities have also stepped up inflation-control measures after June’s inflation reading reached the upper end of Bank Indonesia’s 1.5%–3.5% target band, including efforts to stabilise food prices.

Still, gains in the rupiah were capped by worries that higher crude oil prices could strain the budget of the net oil-importing economy. Investor sentiment remained fragile, reflected in Indonesia’s drop to the bottom of the ASEAN-6 in the 2026 World Competitiveness Ranking and substantial foreign capital outflows earlier in the year.