Rupiah Under Pressure as Dollar Rises Amid Rising US Yields

The Indonesian rupiah has come under strain as the US dollar continues to rise. The currency slipped to near IDR 17,900 per US dollar on Thursday, extending its recent decline amid surging US Treasury yields and bets on further policy tightening.

Locally, fundamentals remain weak due to softer consumer confidence and sluggish household spending. Fiscal worries are also adding pressure as higher oil prices lift budget risks.

Bank Indonesia has taken steps to support the currency through measures beyond interest rates, including raising the FX swap hedging incentive to 25% to encourage foreign capital inflows and curb speculative pressure.