30.03.202606:14:19UTC+00Rupiah Nears 17,000 as Strong Dollar, Oil Risks Weigh

The Indonesian rupiah weakened toward IDR 17,000 per dollar on Monday, erasing gains from the previous two sessions, as the US dollar index remained firm amid the ongoing conflict in the Middle East. Market sentiment was also cautious ahead of key domestic data releases next week, including March inflation and February trade figures.

Headline inflation accelerated to 4.76% year-on-year in February, moving above Bank Indonesia’s target range of 1.5% to 3.5%. Recent negative outlook revisions by Moody’s and Fitch have heightened concerns over potential sovereign rating downgrades.

The government has reiterated that it has no intention of breaching the 3% budget-deficit ceiling. However, persistently elevated oil prices could put this commitment under pressure and force policy adjustments. At the same time, uncertainty persists over whether new central bank measures taking effect on April 1 will be sufficient to curb speculation in the rupiah and stabilize the currency.

As a net importer of oil and gas, Indonesia remains exposed to rising global energy prices, a key factor continuing to weigh on the rupiah.