FX.co ★ Rupiah Lingers Near Historic Low

The Indonesian rupiah traded near a record low of IDR 17,130 per dollar on Wednesday, even as the U.S. dollar index hovered around a six-week trough amid softer safe-haven demand driven by hopes for a diplomatic resolution to the Middle East conflict. The rupiah’s weakness reflected ongoing capital outflows and fragile domestic fundamentals, keeping investor sentiment cautious ahead of next week’s monetary policy meeting. In March, Bank Indonesia left its benchmark rate unchanged at 4.75% for the sixth consecutive meeting, following a cumulative 150 basis points of cuts since September 2024. Although inflation is currently within the central bank’s target range, risks are skewed to the upside, stemming from volatile oil prices and mounting fiscal pressures tied to President Prabowo’s flagship programs. Policymakers have indicated limited scope for further easing, with Governor Perry Warjiyo emphasizing a pivot toward safeguarding stability through measured and consistent intervention in both the spot and non-deliverable forward markets.