The Indonesian rupiah hovered near a record low of IDR 17,130 per dollar on Wednesday, even as the U.S. dollar index remained at a six-week low amid easing safe-haven demand on hopes for a diplomatic resolution to the Middle East conflict. Weakness in local currency reflected persistent capital outflows and fragile domestic fundamentals, keeping sentiment subdued ahead of next week’s monetary policy meeting. In March, Bank Indonesia held its benchmark rate at 4.75% for a sixth straight meeting, following a cumulative 150bp of reduction since September 2024. While current inflation remained within the central bank’s target range, risks are tilted to the upside due to volatile oil prices and rising fiscal pressures linked to President Prabowo’s key programs. Policymakers have signaled limited room for further easing, with Governor Perry Warjiyo stressing a shift toward safeguarding stability through measured and consistent intervention in both spot and non-deliverable forward markets.