Rupiah Holds Near IDR 17,800 Ahead of BI Rate Call
The Indonesian rupiah hovered near IDR 17,800 per U.S. dollar on Wednesday, extending recent gains as traders awaited Bank Indonesia’s policy decision later today. Markets expect the central bank to leave its benchmark rate unchanged at 5.75% for a third straight month as policymakers balance currency stability against domestic growth amid heightened global macro pressures. The board has already delivered 100bps of cumulative tightening earlier this year, leaving less room for further aggressive hikes without weighing on economic activity. Meanwhile, falling oil prices eased concerns over imported inflation and fiscal pressures, although domestic price pressures persisted after annual inflation accelerated to 3.19% in August, driven partly by higher food prices amid El Niño-related supply disruptions. However, a firm U.S. dollar capped the rupiah’s gains, with the dollar index holding near an eight-week high as hawkish Fed signals reinforced bets of another rate hike later this year.
S. dollar on Wednesday, extending recent gains as traders awaited Bank Indonesia’s policy decision later today. 75% for a third straight month as policymakers balance currency stability against domestic growth amid heightened global macro pressures. The board has already delivered 100bps of cumulative tightening earlier this year, leaving less room for further aggressive hikes without weighing on economic activity.
19% in August, driven partly by higher food prices amid El Niño-related supply disruptions. S. dollar capped the rupiah’s gains, with the dollar index holding near an eight-week high as hawkish Fed signals reinforced bets of another rate hike later this year.