FX.co ★ Rupiah Near Record Low as Safe-Haven Demand Lifts Dollar

The Indonesian rupiah weakened toward IDR 16,970 per dollar on Monday, extending its decline for a third consecutive session and approaching its record low of IDR 16,985 set in January. The move came as the US dollar index climbed to a three-month high, supported by persistent safe-haven demand amid the Iran conflict, now in its second week with few signs of de-escalation.

Market sentiment at home was further undermined after Moody’s and Fitch revised Indonesia’s credit outlook to negative, heightening concerns over fiscal credibility and policy consistency. On the data front, consumer confidence slipped in February after reaching a one-year high in January, signaling mounting cost pressures ahead of Eid al-Fitr. At the same time, foreign exchange reserves dropped to a three-month low, highlighting growing strain on the country’s external buffers.

Even so, expectations that policymakers will prioritize currency stability helped contain deeper losses, as a sharp rupiah depreciation could stoke imported inflation, accelerate capital outflows, and unsettle the domestic bond market.