FX.co ★ BI Support Lifts Rupiah But Weekly Loss Still Looms

The Indonesian rupiah firmed to around IDR 17,970 per U.S. dollar on Friday afternoon, recovering after an earlier dip to roughly IDR 18,030. The rebound was underpinned by a new round of support measures from Bank Indonesia, including cheaper FX hedging facilities, initiatives to expand the use of local currencies in trade, and adjustments to its liquidity framework aimed at improving liquidity distribution across banks.

Earlier in the week, the central bank left its policy rate unchanged, following a cumulative 100-basis-point increase since May to shore up the rupiah. Nonetheless, the currency remains on course to post a slight weekly loss, as sentiment stays fragile. Oil prices have climbed above USD 100 per barrel, amplifying fiscal worries for Indonesia, a net oil importer.

Bank Indonesia also highlighted El Niño-related risks that could push food prices higher, though it still expects inflation to remain within its target band through 2027. On the global front, the dollar index hovered near a three-week high, as President Trump’s latest tariffs rekindled concerns over a renewed trade war.