FX.co ★ Rupiah Slips Ahead of February Forex Reserve Data

The Indonesian rupiah weakened to around IDR 16,900 per US dollar on Thursday, pressured by a firmer greenback following stronger-than-expected US economic data and heightened safe-haven demand as Middle East tensions entered a sixth day.

As a net importer of oil and gas, Indonesia remains vulnerable to rising energy costs. Authorities are reportedly considering domestic fuel price adjustments after the closure of the Strait of Hormuz, a key global oil shipping chokepoint.

Headline inflation accelerated to 4.76% in February, its highest level in nearly three years and above Bank Indonesia’s 1.5%–3.5% target band. The increase was driven in part by base effects linked to last year’s temporary electricity tariff discounts.

Governor Perry Warjiyo stated that inflation is expected to remain manageable in 2026–2027, suggesting scope for further monetary easing after a cumulative 150 basis points of rate cuts since September 2024. To shore up the rupiah, the central bank has intensified intervention in both spot and forward foreign-exchange markets.

Investors are now awaiting the release of February foreign-exchange reserve data on Friday, following a decline in January from a nine-month peak.