Rupiah strengthens despite Fitch revising Indonesia's debt rating outlook to negative

Jakarta – The rupiah was expected to remain volatile but closed weaker on the day. Using Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (Jisdor), the rupiah stood at Rp16,911 per US dollar on Wednesday, 4 March 2026, weakening by 41 points from Rp16,870 on Tuesday, 3 March 2026.

In the spot market on Thursday, 5 March 2026, as of 09:09 WIB, the rupiah traded at Rp16,883 per US dollar, strengthening by 9 points or 0.05% from the previous level of Rp16,892.

Market watcher Ibrahim Assuaibi said Fitch Ratings revised the outlook on Indonesia’s debt rating from stable to negative. However, the long-term foreign currency issuer default rating (IDR) remained BBB. The outlook revision reflects rising policy uncertainty and concerns about the consistency and credibility of Indonesia’s policy mix amid increasing centralised decision-making.

‘This condition could weigh on medium-term fiscal prospects, undermine investor sentiment, and exert pressure on external resilience,’ Ibrahim said in his daily research note on Thursday, 5 March 2026.

Fitch maintained the BBB rating, noting Indonesia’s track record of macroeconomic stability. This is supported by mid-term growth prospects, a moderate government debt-to-GDP ratio, and external reserves that remain adequate. Fitch projects the 2026 fiscal deficit to be around 2.9% of GDP, higher than the government’s 2.7% target, influenced by more conservative revenue assumptions and higher social spending, including the Makan Bergizi Gratis (MBG) programme.

Meanwhile, Bank Indonesia signalled a tight watch on the inflation impact of higher global energy prices. To safeguard the rupiah, BI continued interventions in the market via Non-Deliverable Forwards (NDF) in the offshore market, spot and Domestic Non-Deliverable Forwards (DNDF) in the domestic market, together with purchases of government securities (SBN) in the secondary market.