FX.co ★ Rupiah Weakens Toward Record Low Ahead of Rate Decision

The Indonesian rupiah hovered near IDR 16,970 per dollar on Wednesday, remaining close to the critical 17,000 threshold that would denote a new low. Attention has turned to the central bank's policy decision scheduled for later today, with expectations that interest rates will be held steady for the fourth consecutive month. Nonetheless, there is growing speculation about the possibility of further easing measures, as policymakers seek to bolster economic growth following last year’s calamity in Sumatra. Over the past year, the board has implemented a total of 150 basis points in rate cuts amid tepid inflation. Since the beginning of 2026, the rupiah has depreciated by nearly 2%, stirred by renewed concerns about the independence of institutions following President Prabowo's nomination of his nephew to the central bank's board of governors. In an effort to assuage investor worries, Finance Minister Purbaya Yudhi affirmed the central bank's autonomy and expressed confidence in a gradual recovery of the rupiah. On the global front, the dollar index declined for a third consecutive session after U.S. President Trump insisted there was "no going back" on his plan involving Greenland, thereby exacerbating geopolitical risks.