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Indonesian rupiah seen at risk as USD/IDR tops 18,000 again

MUFG said persistent net foreign equity outflows are tilting risks toward further rupiah weakness even with bond yields supporting foreign inflows.

Reported · Written up by our desk · Major Pairs

MUFG’s Lloyd Chan flagged continued vulnerability in the Indonesian rupiah after USD/IDR moved back above 18,000, pointing to renewed Middle East tensions and elevated US yields as key pressures.

Chan noted that attractive government bond yields and SRBI yields have supported foreign inflows into Indonesia’s bond market, but persistent net foreign equity outflows have left the overall risk balance leaning toward more rupiah weakness.

The FXStreet commentary also linked broader dollar strength conditions to ongoing uncertainty around the US-Iran conflict, alongside higher Treasury yields, which have helped keep pressure on the rupiah.

The piece framed the backdrop for currency trading as a mix of capital flow dynamics and macro factors, with foreign investors reducing equity exposure while bond yields continue to attract demand.

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