21.04.202603:42:12UTC+00Rupiah Stays Above Key Level as BI Meeting Begins

The Indonesian rupiah traded around IDR 17,140 on Tuesday, remaining above the key psychological level of 17,000 for a second week. Downward pressure persisted as Bank Indonesia began its two-day policy meeting, where interest rates are widely expected to be left unchanged at 4.75% for a seventh consecutive decision, following a cumulative 150 bps of cuts since September 2024.

Inflation risks remain elevated amid ongoing tensions in the Middle East. As a net importer of oil and gas, Indonesia is particularly exposed to rising energy prices, which have already led to higher non-subsidized fuel prices. Seasonal dividend repatriation also continued to fuel capital outflows, while ongoing central bank intervention has further burdened foreign exchange reserves, which fell in March to their lowest level in nearly two years.

Fiscal concerns added to the cautious mood, although Finance Minister Purbaya Yudhi Sadewa emphasized that the country’s debt service ratio is still at a manageable level. Externally, the U.S. dollar index stabilized after recent declines as global markets evaluated the prospects for a longer-term peace agreement between Washington and Tehran.