The Indonesian rupiah slipped near IDR 17,900 per U.S. dollar on Thursday, extending its decline as the dollar index hovered near a two-month high. Surging U.S. Treasury yields and expectations of further policy tightening followed solid U.S. private-sector activity. Domestic conditions also weighed on the currency, with softer consumer confidence and sluggish household spending. Higher oil prices increased budget risks, while lawmakers pushed to amend the State Finance Law to permit deficits above 3% of GDP. Bank Indonesia has responded with measures beyond interest rates, including lifting its FX swap hedging incentive to 25% to attract foreign capital and limit speculative pressure. The central bank held its benchmark rate at 5.75% for a third month in September after raising it by a cumulative 100 basis points in three moves since May. The rupiah has weakened about 0.8% this week, putting it on course for a second consecutive weekly loss.