Rupiah Eases Amid Dollar Strength, Inflation Concerns

Indonesia’s rupiah edged lower, hovering near IDR 17,960 per U.S. dollar on Thursday, the first trading day of October, after briefly touching 17,930 in the prior session. Cautious sentiment lingered as the dollar index hit an 18-month high and U.S. Treasury yields rose to multi-year peaks, amid concerns that energy-driven inflation could keep policy tighter for longer. Locally, inflation worries deepened after September headline inflation accelerated to 3.28% yoy, a three-month high, reflecting persistent food-price pressures amid El Niño effects. Elevated crude prices added risks for Indonesia, a net oil importer, by raising import costs and fiscal pressure. Still, some support came from stronger-than-expected August trade data, with the surplus widening sharply as exports rose 6.72%, though imports grew faster at 19.09%. Bank Indonesia continued to bolster liquidity and rupiah stability through secondary-market bond purchases and a mix of spot, DNDF and offshore NDF interventions.