09.06.202604:46:13UTC+00Rupiah Remains Vulnerable

The Indonesian rupiah weakened to a near-record low of about IDR 18,170 per U.S. dollar on Tuesday, marking its sixth straight session of losses. This decline persisted even as the U.S. dollar eased from a nine-week high following an agreement between Iran and Israel to halt attacks, which helped reduce geopolitical tensions.

Domestic factors continued to weigh heavily on the rupiah: foreign exchange reserves fell further in May, bond yields continued to rise, and import costs increased, all highlighting Indonesia’s external vulnerabilities. Market concerns intensified after reports that Washington may introduce an 18% tariff on Indonesian goods starting July 24, a move that could erode export competitiveness and disrupt capital flows.

Traders largely ignored a sharp increase in tax revenues in the first five months of 2026, despite officials presenting it as evidence of a strengthening economy. The rupiah is now down nearly 9% year-to-date, cementing its status as Asia’s weakest currency, even after Bank Indonesia’s surprise 50bp rate hike in May to 5.25%, its first policy tightening since 2022.