Natasha Khairunisa, Arnoldus Kristianus, Jakarta – Rupiah weakened to a fresh record low of Rp 18,184 per US dollar on Wednesday as oil prices above $100 per barrel heightened concerns over Indonesia's fiscal outlook, while rising US rate expectations and foreign fund outflows added pressure on the currency.
Rupiah closed down 28 points, or 0.15%, from Tuesday's close of Rp 18,156 per dollar.
Traze Andalan Futures Director Ibrahim Assuaibi said persistently high global oil prices were weighing on the rupiah by raising the government's energy subsidy and compensation costs, potentially widening the state budget deficit.
"Oil prices remaining above $100 per barrel could increase pressure on the state budget, particularly through higher energy subsidy and compensation costs. This could widen the budget deficit unless offset by higher state revenue or spending cuts," Ibrahim said in a statement received on Wednesday.
Higher oil prices could also fuel inflation and increase production and transportation costs, he added, urging the government to maintain fiscal balance, ensure subsidies reach their intended recipients and secure stable energy supplies.
External pressures persisted despite signs of easing tensions in the Middle East. Saudi Arabia, Turkey and Pakistan held talks with Iranian officials in Tehran on Monday and agreed to continue discussions aimed at strengthening regional peace and security, although the talks had yet to produce the desired results.
Tensions remained elevated after Yemen's Houthi group said it had attacked Saudi Arabia's largest oil refinery, adding to uncertainty over regional energy supplies.
Investors were also watching the US Federal Reserve's policy decision on Wednesday for signals about the economic outlook and fuel demand.
"Higher oil prices could add to inflationary pressures, potentially complicating the Federal Reserve's policy decisions," Ibrahim said.
Bank Indonesia (BI) reaffirmed its commitment to intervening in financial markets to stabilize the rupiah, maintaining close coordination with corporations, market participants and other stakeholders.
BI Monetary and Securities Asset Management Department Head Erwin Gunawan Hutapea said the central bank was conducting consistent stabilization measures through offshore non-deliverable forwards (NDFs), domestic non-deliverable forwards (DNDFs) and spot market transactions. BI was also purchasing government bonds in the secondary market.
"BI continues to be present in the market to ensure that market mechanisms function properly and that the rupiah remains stable in line with its fundamentals," Erwin said in a statement received on Wednesday.
He said rupiah movements and other regional currencies remained affected by uncertainty surrounding the Middle East conflict, which had kept oil prices above $115 per barrel and increased future fiscal risks.
"Expectations of US interest rate increases have also risen," he added.
BI said the rupiah's movements remained broadly in line with regional currencies, although the currency had weakened 1.15% over the month. Indonesia's foreign exchange reserves stood at $146.3 billion at the end of September 2026.
A worsening risk-off sentiment has strengthened the US dollar and triggered capital outflows from emerging markets, alongside rising bond yields.
Domestically, concerns over a potential downgrade of Indonesia's stock market classification by MSCI have also weighed on capital flows, Erwin said. Increased domestic demand for foreign currency ahead of month-end has added to the pressure.
At 3:59 p.m. Jakarta time, the Singapore dollar traded at Rp 14,177, the Japanese yen at Rp 115.28, the Australian dollar at Rp 12,788, and the euro at Rp 20,216, according to Bloomberg data.