Rupiah Gains Capped by Dollar Strength, External Risks
The Indonesian rupiah hovered around IDR 17,910 per U.S. dollar on Tuesday, edging higher from the previous session as traders awaited key domestic releases later this week, including September forex reserves, consumer sentiment, and August retail sales. Meanwhile, fiscal conditions through August were supported by revenue growth, even as tax-restitution delays reportedly persisted. Gains remained limited, however, as Indonesia's external position stayed vulnerable, with elevated imports and energy costs weighing on the balance amid persistent Middle East headwinds. Inflation could also become harder to contain in the coming months as food prices stay elevated following supply disruptions linked to El Niño. On the global front, the dollar index lingered near an 18-month high, lifted by elevated U.S. Treasury yields and higher oil prices, while euro weakness amid political and fiscal concerns in the eurozone further boosted demand for the greenback, capping further rupiah gains.
S. dollar on Tuesday, edging higher from the previous session as traders awaited key domestic releases later this week, including September forex reserves, consumer sentiment, and August retail sales. Meanwhile, fiscal conditions through August were supported by revenue growth, even as tax-restitution delays reportedly persisted. Gains remained limited, however, as Indonesia's external position stayed vulnerable, with elevated imports and energy costs weighing on the balance amid persistent Middle East headwinds.
Inflation could also become harder to contain in the coming months as food prices stay elevated following supply disruptions linked to El Niño. S. Treasury yields and higher oil prices, while euro weakness amid political and fiscal concerns in the eurozone further boosted demand for the greenback, capping further rupiah gains.