On Thursday, the Indonesian rupiah hovered near a record low of 17,500 against the US dollar in light trading, after briefly dipping below 17,450 in the previous session. A stronger dollar dampened market sentiment, while rising inflation reinforced expectations that the Federal Reserve would maintain a hawkish stance. Ahead of next week's policy meeting, concerns resurfaced about the Bank Indonesia's ability to defend the rupiah, with some analysts calling for an increase in interest rates from the current 4.75% to 5.0% to curb capital outflows. President Prabowo Subianto recently criticized Bank Indonesia Governor Varjiyo's criticism of the rupiah's weakness while supporting new measures including tightening foreign exchange controls and adjusting liquidity. Furthermore, traders remained cautious due to weak domestic fundamentals, declining foreign exchange reserves, fiscal pressures, and continued foreign selling. To limit losses, the Indonesian government has launched a bond stabilization fund to support the bond market amid rising yields. The rupiah has fallen by about 0.5% so far this week, on track for its seventh consecutive week of decline.