The Indonesian rupiah weakened to around IDR 17,740 per U.S. dollar on Tuesday in thin holiday trading, extending its recent decline after reaching a near ten-week high last week. Concerns over Indonesia’s external balance intensified after the current account deficit widened to a record USD 12.5 billion in Q2 2026, with elevated oil prices, firm import demand and softer exports posing near-term risks. Traders also adopted a cautious stance ahead of July trade data and August inflation due next week, while El Niño risks added to food-price concerns. Losses were limited by expectations that Bank Indonesia, led by acting Governor Destry Damayanti, will prioritize rupiah stability after holding its policy rate at 5.75% in August following 100 basis points of tightening since May. The U.S. dollar steadied after recent gains, while new U.S. measures restricting Iran’s access to the financial system kept geopolitical risks elevated.