25.06.202605:08:39UTC+00Rupiah Stays Weak on Hawkish Fed Outlook

The Indonesian rupiah traded just above IDR 17,900 per U.S. dollar on Thursday, remaining under pressure as the U.S. dollar index hovered near a 14‑month high following signals from the Federal Reserve in support of tighter monetary policy. The Fed’s hawkish stance overshadowed the supportive effects of progress in U.S.-Iran peace talks, which had helped ease geopolitical tensions and dampen demand for safe-haven assets.

Domestically, market participants were focused on next week’s June inflation release, particularly food prices, after they recorded their fastest annual increase in seven months in May, underscoring the impact of El Niño. Downward pressure on the rupiah was partially offset by continued foreign inflows into Bank Indonesia’s one-year securities and government bonds, which have reached around IDR 105 trillion so far in June.

Lower oil prices, which have fallen back toward pre-conflict levels with Iran, also helped alleviate concerns about Indonesia’s fiscal position. Separately, MSCI reaffirmed Indonesia’s classification as an emerging market, while at the same time flagging ongoing issues related to market transparency.