The Indonesian rupiah was little changed on Wednesday, trading around IDR 16,860 per dollar, as Bank Indonesia reiterated its commitment to “firm and consistent intervention” in both onshore and offshore markets to support the currency. The central bank has intensified its stabilisation efforts since late 2024, including selling US dollars from its foreign exchange reserves, purchasing government bonds on the secondary market, and using non-deliverable forwards to help anchor market expectations.
However, the sustainability of these measures is in question, given relatively limited reserve buffers. Foreign exchange reserves fell to a three-month low of USD 151.9 billion in February. On the policy side, Bank Indonesia is scheduled to meet next week, after leaving its benchmark interest rate unchanged at 4.75% for a fifth consecutive meeting in February, following a total of 150 basis points in cuts since September 2024.
Externally, the US dollar index remained firm, as escalating tensions in the Middle East bolstered demand for the safe-haven currency ahead of a key US inflation release.
