FX.co ★ Rupiah Eases Further Ahead of BI Policy Meeting

The Indonesian rupiah weakened toward 16,950 per US dollar on Friday, extending its losses for a fourth consecutive session, as the dollar index strengthened on safe-haven demand amid the ongoing Middle East conflict, with little sign of de-escalation. Market participants also remained cautious ahead of Bank Indonesia’s policy meeting next week and the upcoming Eid holiday.

In February, the central bank left its benchmark interest rate unchanged at 4.75% for a fifth straight meeting, in line with expectations, after cutting a total of 150 basis points since September 2024. Nevertheless, policymakers have signaled they are looking for scope to ease further in order to support economic growth, following the drag on activity from last year’s Sumatra disaster.

Meanwhile, the government expects the economy to grow by 5.5%–6% in 2026, up from a projected 5.11% in 2025. For the week, the rupiah is on track to edge about 0.2% lower, despite active Bank Indonesia intervention in both spot and forward foreign exchange markets.