Rupiah Weakens Ahead of Key Data Amid Firm Dollar
The Indonesian rupiah slipped past IDR 17,950 per U.S. dollar on Monday, reversing prior gains as a stronger greenback weighed on sentiment. The dollar index hovered near a two-month high, buoyed by rising oil prices that reinforced expectations of further Fed tightening and by heightened geopolitical risks. Locally, caution prevailed ahead of key releases later this week, including August trade, September inflation, and manufacturing activity. Meanwhile, a central bank official said the rupiah remained under pressure from strong foreign-exchange demand among importers and continued portfolio outflows from domestic assets. Still, the weakness was capped by Bank Indonesia’s multi-market interventions spanning offshore NDFs, domestic spot, and DNDF markets. Policymakers last week kept the benchmark rate at 5.75% for a third month after cumulative 100bp hikes since May. Meanwhile, coordinated steps to contain food-price pressures continued following a recent pickup in headline inflation.
S. dollar on Monday, reversing prior gains as a stronger greenback weighed on sentiment. The dollar index hovered near a two-month high, buoyed by rising oil prices that reinforced expectations of further Fed tightening and by heightened geopolitical risks. Locally, caution prevailed ahead of key releases later this week, including August trade, September inflation, and manufacturing activity.
Meanwhile, a central bank official said the rupiah remained under pressure from strong foreign-exchange demand among importers and continued portfolio outflows from domestic assets. Still, the weakness was capped by Bank Indonesia’s multi-market interventions spanning offshore NDFs, domestic spot, and DNDF markets. 75% for a third month after cumulative 100bp hikes since May. Meanwhile, coordinated steps to contain food-price pressures continued following a recent pickup in headline inflation.