Rupiah Weakness Persists Amid Rising Oil Prices
The Indonesian rupiah slipped toward IDR 17,650 per U.S. dollar on Monday, weakening for a third session as the U.S. dollar index continued to firm ahead of the Fed’s upcoming policy meeting. The currency also faced pressure from a surge in oil prices, which could further stoke inflation and weigh on Indonesia’s fiscal position given its status as a net oil importer. Inflation concerns deepened after headline figures accelerated to 3.19% in August, despite government efforts to contain food-price volatility amid the impact of El Niño. Still, losses were limited by policy assurances from Bank Indonesia Governor Destry Damayanti, who recently said policy stability would remain a key focus, with monetary, macroprudential and payment-system policies forming the main pillars of the central bank’s framework. BI is due to hold its next policy meeting next week after keeping its benchmark rate unchanged for a second consecutive month in August, following a cumulative 100bp rate hike since May.
S. S. dollar index continued to firm ahead of the Fed’s upcoming policy meeting. The currency also faced pressure from a surge in oil prices, which could further stoke inflation and weigh on Indonesia’s fiscal position given its status as a net oil importer.
19% in August, despite government efforts to contain food-price volatility amid the impact of El Niño. Still, losses were limited by policy assurances from Bank Indonesia Governor Destry Damayanti, who recently said policy stability would remain a key focus, with monetary, macroprudential and payment-system policies forming the main pillars of the central bank’s framework. BI is due to hold its next policy meeting next week after keeping its benchmark rate unchanged for a second consecutive month in August, following a cumulative 100bp rate hike since May.