Indonesia’s rupiah may weaken further due to persistent Fed rate expectations and elevated global borrowing costs, analysts said.
Indonesia’s rupiah is under sustained depreciation pressure as wider current and financial account deficits heighten downside risks. Analysts cite the Federal Reserve’s higher-for-longer interest rate stance and rising global yields as key drivers of the currency’s weakness in coming quarters.
Bank Indonesia expects the current account deficit to remain manageable, but soft global demand and commodity price volatility could constrain export performance. Geopolitical tensions and external uncertainties add to the currency’s vulnerability, keeping Indonesia’s external position under pressure.
Policy coordination between the government and private sector, including capital mobilization initiatives, may provide structural support to external balances amid ongoing challenges.