FX.co ★ Rupiah Holds Weak as BI Policy Meeting Nears

The Indonesian rupiah hovered around IDR 17,160 on Monday, after briefly touching a new low near IDR 17,200 in the previous session. Despite the modest rebound, the currency remains under pressure as a stronger U.S. dollar—supported by renewed U.S.–Iran tensions—fuels demand for safe-haven assets. Persistent capital outflows continue to weigh on the rupiah, driven by elevated oil prices, rising inflation risks, and seasonal dividend repatriation. Fiscal headwinds are adding to the downside as policymakers try to balance financial stability with growth. Against this backdrop, Bank Indonesia will convene a policy meeting this week, with markets expecting a cautious stance after the central bank left rates unchanged in March for a sixth consecutive meeting, following a total of 150 bps in cuts since September 2024. Ongoing intervention could further pressure foreign exchange reserves, which fell in March to their lowest level in nearly two years. Jakarta is still targeting economic growth above 5.3% in 2026, while the IMF projects a softer 5.0% amid global uncertainties and commodity price volatility.