The currency extended gains for a second day as markets awaited Bank Indonesia's policy decision, while officials highlighted fiscal resilience and investors weighed inflation, oil costs and capital outflows.
Indonesia's rupiah hovered around IDR 17,900 per U.S. dollar on Wednesday, extending gains for a second day even as the broader dollar remained firm, with markets focused on Bank Indonesia's policy decision. The central bank is widely expected to raise its key interest rate by 25 basis points to 6.0% after a cumulative 100 basis points of tightening in May and June to support the currency. Finance Minister Purbaya Yudhi said Indonesia's fiscal position remained resilient, citing a stable sovereign outlook and a manageable deficit, while authorities stepped up inflation-control measures after June inflation reached the upper end of Bank Indonesia's 1.5% to 3.5% target range, including efforts to stabilize food prices. Still, rupiah gains were capped by worries that higher crude prices could pressure the budget of the net oil-importing nation. Sentiment also remained fragile as Indonesia fell to the bottom of the ASEAN-6 in the 2026 World Competitiveness Ranking and after heavy foreign capital outflows earlier this year.