The Indonesian rupiah hovered around IDR 17,100 per dollar on Friday, extending its recent decline as broad U.S. dollar strength weighed on sentiment ahead of U.S.–Iran talks and the release of March CPI data. External pressures intensified amid concerns over capital outflows after the World Bank cut Indonesia’s 2026 growth forecast, a move Finance Minister Purbaya Yudhi criticized as failing to account for government support measures. The rupiah is on track for a second consecutive weekly loss, down about 0.6% so far, as doubts persist over the economy’s resilience to external shocks.
Weaker domestic fundamentals have added to the strain: consumer confidence slipped to a five-month low in March, foreign exchange reserves fell to their lowest level in nearly two years, and the trade surplus narrowed in February. Although inflation eased slightly, volatile oil prices continue to pose risks and compound fiscal pressures tied to President Prabowo’s flagship programs. Bank Indonesia has intervened in the market and signaled it stands ready to use additional policy tools, emphasizing that the rupiah’s depreciation is driven largely by global factors.
