The rupiah hovered near IDR 17,870 per U.S. dollar on Friday after briefly touching a record low of 17,970 in the prior session. Sentiment steadied as the U.S. dollar index eased on reports of a tentative U.S.–Iran peace deal, tempering fears of inflation and further Fed hikes. Still, caution lingered ahead of May inflation and April trade data due next week. Risks are building as energy costs rise, while March exports shrank and imports stayed weak, underscoring external fragility. Concerns also persist over new rules requiring exporters to retain proceeds locally, with traders doubtful the measure will meaningfully lift foreign reserves since funds remain under exporter control. The rupiah is on track for a third straight monthly drop, down nearly 3% in May and 6.6% year-to-date, ranking among Asia’s weakest alongside the Indian rupee and Philippine peso. Fiscal strains and capital outflows continue to weigh despite Bank Indonesia’s mid-May rate hikes and other stabilisation efforts.