The Indonesian rupiah hovered near IDR 18,050 per dollar on Friday, remaining under pressure as weak domestic fundamentals outweighed support from a softer greenback. The dollar index extended recent losses after reports that the U.S. and Iran would continue peace negotiations, easing safe-haven demand. Locally, sentiment remained fragile, with May retail sales posting the steepest annual drop in three years as higher non-subsidized fuel prices squeezed spending. Meanwhile, consumer confidence fell for a third straight month in June amid concerns over income, jobs, and future consumption. For the week, the currency was set for a third consecutive decline, down about 0.7% so far, reflecting fears that Indonesia could be downgraded to frontier-market status next year. Still, losses were partly cushioned by stabilizing oil prices, a modest rise in forex reserves, and government measures to bolster food supplies and prepare for El Niño, tempering worries over food inflation.
