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2026.02.2008:01:22UTC+00Rupiah Extends Gains After BI Holds Rates, Dollar Caps Upside

The Indonesian rupiah traded around IDR 16,880 per dollar on Friday, rising for a second consecutive session after Bank Indonesia left its benchmark interest rate unchanged for a fifth straight meeting, in line with market expectations. Governor Perry Warjiyo said the decision is intended to stabilize the currency and sustain economic growth, following a cumulative 150 basis points of rate cuts since September 2024.

The board reiterated its view that the rupiah is still undervalued and vowed to maintain active intervention in the foreign exchange market, underpinned by robust FX reserves. It expects these measures, together with stable economic fundamentals, to help the rupiah stabilize and gradually appreciate over time. Bank Indonesia also forecast that economic growth will strengthen in the first quarter of 2026, supported by firmer household consumption and increased investment.

Still, the rupiah slipped about 0.2% over the week as policymakers indicated they would evaluate the scope for further monetary easing. On the external front, Indonesia’s current account swung back into deficit in the fourth quarter of 2025 after posting a surplus in the previous quarter. Globally, the US dollar index hovered near 98, bolstered by solid US economic data and hawkish comments from Federal Reserve officials, limiting further gains in the rupiah.

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