11.02.202606:02:21UTC+00Rupiah Strengthens as Dollar Extends Losses

The Indonesian rupiah strengthened to below IDR 16,780 per dollar on Wednesday, rebounding from a brief decline to around 16,850 in the previous session. Support for the currency improved as the U.S. dollar index extended its decline ahead of January’s jobs report and after weaker-than-expected U.S. retail sales data.

Attention also shifted to Bank Indonesia’s policy meeting next week, following the swearing-in of Thomas Djiwandono as deputy governor, replacing Juda Agung in a direct role exchange with the finance ministry. The central bank has reaffirmed its commitment to stabilizing the rupiah while maintaining policy flexibility, having delivered a total of 150 basis points of rate cuts since September 2024 amid subdued inflation.

Upside for the rupiah, however, was limited by mounting external risks, including reports that the European Union may extend sanctions to Indonesian ports that handle Russian oil. Separately, a central bank survey indicated that households are allocating a smaller share of income to consumption and a larger share to savings and debt repayment, signaling cautious financial behavior despite an improvement in overall confidence.