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USD/IDR strengthens after three-session rupiah slide
The pair traded near 17,740 in Asian hours, with Bank Indonesia pointing to its recent rate actions and a readiness to respond if rising US Treasury yields weigh on the rupiah.
The Indonesian rupiah is still under pressure, but the USD/IDR pair moved higher after three straight sessions of losses, trading around 17,740 during Asian hours on Monday.
FXStreet said the latest momentum could face headwinds because Bank Indonesia has the recent monetary lift to draw on, including a cumulative 100 basis point rate hike delivered between May and June to defend the currency. The central bank also kept the BI Rate unchanged as part of a broader stability effort, highlighting how it is seeking to strengthen rupiah resilience amid heightened global volatility linked to the war in the Middle East.
The outlet also flagged a potential downside for USD/IDR if US rates rise further, citing an Acting Governor Destry Damayanti warning that rising US Treasury yields could call for a stronger future response, implying additional tightening if external pressure on the IDR intensifies.
On the US side, FXStreet noted the dollar may face pressure from newly announced fiscal measures and that the Treasury Department pledged to at least double buybacks of longer-dated government debt to help curb rising bond yields, with buybacks that could exceed $4 billion. Still, the greenback’s downside may be limited by safe-haven demand as geopolitical tensions in the Middle East keep risk sentiment cautious.