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Rupiah slides for third straight day as Indonesia posts record deficit
USD/IDR traded around 17,760 in Asia, even as Bank Indonesia held its key rate at 5.75% for a second consecutive month.
USD/IDR extended losses for a third straight day, trading around 17,760 during Asian hours on Friday. Despite the Indonesian rupiah staying supported, the move reflects the currency pair's continued depreciation against a backdrop of a sharp deterioration in Indonesia's external balance, according to FXStreet.
Indonesia recorded a record current account deficit of USD 12.49 billion in Q2 2026, equivalent to 3.3% of GDP, widening from USD 2.89 billion a year earlier. The expansion was linked to a drastic narrowing of the trade surplus to USD 1.32 billion from USD 10.52 billion in Q2 2025, driven largely by an import surge attributed to rising oil prices tied to conflict in the Middle East.
FXStreet also pointed to support for the rupiah from Indonesia's deep economic partnership with China. Market sentiment was buoyed by comments from Chinese Vice Finance Minister Liao Min, who said China would introduce timely additional fiscal policy measures based on emerging economic trends while maintaining policy continuity.
On monetary policy, Bank Indonesia kept its key interest rate steady at 5.75% for a second consecutive month, under acting Governor Destry Damayanti, following the abrupt exit of Perry Warjiyo. FXStreet further noted that USD downside pressure was compounded by a softening US dollar tied to subdued US Treasury yields as markets react to Washington's long-end bond buyback program.