Indonesia: Rupiah Extends Losses on Safe-Haven Dollar Demand, Growth Concerns.

The Indonesian rupiah slipped beyond IDR 18,100 per U.S. dollar on Monday, extending declines for a second straight session as renewed tensions in the Middle East boosted demand for the safe-haven U.S. dollar. Locally, sentiment was weighed by mounting concerns that economic growth momentum may have begun to soften in Q2 and could remain subdued in the coming quarters, following a robust 5.61% yoy expansion in Q1, as recent indicators pointed to softer domestic demand. Consumer sentiment fell for a third consecutive month in June, with retail sales dropping the most in three years in May. The risk of Indonesia being downgraded to frontier-market status in 2027 added to concerns over potential foreign capital outflows. Still, the rupiah's losses were partly tempered by Bank Indonesia's cumulative 100bp rate hikes between May and June. Meanwhile, ongoing government efforts to strengthen food supplies and mitigate El Nino's impact helped ease concerns over food inflation.