The Indonesian rupiah weakened beyond IDR 16,900 per dollar on Thursday, extending its recent slide as the dollar index stayed firm on the back of robust U.S. economic data and unexpectedly hawkish signals in the latest Fed minutes. Market caution also intensified ahead of Bank Indonesia’s policy decision due later today.
The central bank is widely expected to leave its benchmark interest rate unchanged at 4.75% for a fifth consecutive meeting, after cutting a total of 150 basis points since September 2024. Still, speculation about further easing persists, as policymakers seek to support growth while natural disaster risks remain elevated following last year’s adversity in Sumatra.
Indonesia’s economy expanded by 5.11% in 2025, just below the official 5.2% target, while the growth goal for 2026 has been raised to 5.4%. Fiscal policy continues to prioritize disaster recovery and social assistance, particularly during Ramadan and the upcoming Eid al-Fitr holidays. Traders are also awaiting Q4 current account figures, after the balance recorded its first surplus in nearly two years in Q3.
