Rupiah Under Pressure for Three Consecutive Days, US Dollar Rises to Rp 17,835

The rupiah closed 0.06% lower at Rp 17,835 per US dollar on Tuesday, marking its third consecutive day of losses against the greenback. The currency moved within a range of Rp 17,835 to Rp 17,870 throughout the trading session. Meanwhile, the US Dollar Index (DXY), which measures the dollar against six major currencies, edged up 0.04% to 101.068 as of 3:00 PM Western Indonesian Time. The rupiah’s depreciation was largely driven by external sentiment, particularly the strengthening of the US dollar globally. The greenback’s rise was fuelled by ongoing market concerns that the US Federal Reserve may keep interest rates elevated for a longer period, following its decision to maintain the benchmark rate at 3.50%-3.75%. The Fed’s latest dot plot projections also indicated that high rates could persist, with some officials even suggesting the possibility of further hikes. However, the dollar’s gains were capped by positive developments in US-Iran negotiations. High-level talks in Switzerland reportedly concluded on a relatively positive note, easing geopolitical tensions. As part of an initial agreement, the US agreed to lift its naval blockade on Iran, while Iran reopened the Strait of Hormuz. The easing of supply concerns helped push oil prices lower, reducing inflationary pressures and limiting the dollar’s advance. On the domestic front, Finance Minister Purbaya Yudhi Sadewa expressed confidence that the government can maintain the nation’s economic foundation this year, which should help fading negative sentiment towards Indonesia. He stated that if the economic fundamentals are preserved, the rupiah has the potential to stabilise and even strengthen. Purbaya also noted that the Indonesian economy is currently experiencing acceleration rather than a slowdown, evidence that government policies are being implemented effectively and on schedule, while reducing leakages.