2026.03.0605:50:22UTC+00Rupiah Retreats Further on Soft Forex Reserves Data

The Indonesian rupiah weakened for a second straight session on Friday, slipping to around IDR 16,940 per US dollar, pressured by a stronger greenback as safe-haven demand remained elevated amid rising tensions in the Middle East. On a weekly basis, the rupiah is on track to lose about 0.9%, dragged down by Fitch Ratings’ decision to revise Indonesia’s outlook to negative from stable, citing increasing policy uncertainty and diminishing credibility.

Recent data reinforced the cautious mood. Indonesia’s foreign exchange reserves in February fell to a three‑month low, underscoring pressure on the country’s external buffers. Inflation accelerated to 4.76% year-on-year, the highest in nearly three years and above Bank Indonesia’s 1.5%–3.5% target range, largely due to base effects.

Even so, Governor Perry Warjiyo signaled that inflation is expected to remain subdued in 2026–2027, suggesting room for further monetary easing following a cumulative 150 basis points of rate cuts since September 2024. Downside pressure on the rupiah was partially contained by the central bank’s firm commitment to exchange rate stability, including a pledge to intervene decisively in both spot and forward foreign-exchange markets.