The Indonesian rupiah remained under pressure after MSCI proposed reclassifying Indonesia from emerging market to standalone status, a move that prompted a sharp sell-off in local equities and pushed USD/IDR higher. The pair briefly rose above 18,070 before easing back, last closing at 18012, as Bank Indonesia stepped up its presence in FX and bond markets to curb volatility. The backdrop also includes portfolio outflow risk, elevated oil prices and concerns around the domestic fiscal outlook, with the reclassification proposal still pending and uncertainty affecting sentiment.
Market Dynamics and Policy Response
Technical indicators showed daily MACD in positive territory, though with limited momentum, while RSI hovered near overbought levels. On the chart, 18,190 is flagged as key resistance, described as the 2026 high, while initial support is seen at 17,838, the 23.6% Fibonacci retracement of the 2026 low-to-high move, followed by 17,620 at the 38.2% Fibonacci level. Attention now turns to Bank Indonesia’s policy decision on Wednesday, with any more durable stabilisation tied to clearer market reforms and improved external conditions.
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