The Indonesian rupiah (IDR) could find some near-term relief from a softer US dollar and a pullback in long-end US Treasury yields, according to OCBC Research.
The research house said Bank Indonesia (BI) had kept its policy rate unchanged at 5.75%, while maintaining its focus on rupiah stability and reiterating measures to attract foreign inflows and deepen the country’s foreign exchange markets.
The decision also reinforces policy continuity under acting BI Governor Destry Damayanti, OCBC said.
OCBC expects BI to increasingly rely on non-interest-rate measures to support the rupiah rather than pushing domestic rates materially higher.
These measures include foreign exchange hedging incentives and Bank Indonesia Rupiah Securities (SRBI), which could help strengthen the rupiah while limiting the need for further monetary tightening.
In the near term, a sustained pullback in the US dollar would ease some of the external pressure on the rupiah.
However, OCBC cautioned that elevated oil prices remain a constraint for Indonesia, given their potential impact on the country’s external and inflation dynamics.
The research house said the rupiah could therefore benefit from improved global currency conditions, although the currency’s gains may remain constrained by external risks.
The USD/IDR pair last closed around 17,830, with bearish momentum on the daily chart remaining intact, according to OCBC.
The daily relative strength index (RSI) was flat, suggesting that two-way trading could emerge in the near term.
OCBC identified support levels at 17,760 and 16,630, with the latter corresponding to the 100-day moving average and the 38.2% Fibonacci retracement of the 2026 low-to-high move.
Resistance is seen at around 17,940, around the 21-day and 50-day moving averages.
Overall, OCBC expects the rupiah to receive some support from a weaker US dollar and lower US Treasury yields, while BI’s continued emphasis on non-rate tools signals a preference for maintaining currency stability without materially higher domestic interest rates.
