Rupiah Stays Range-Bound as Dollar Strength, Inflation Risks Persist
The Indonesian rupiah hovered around IDR 17,900 per U.S. dollar on Tuesday, struggling to break out of its narrow range as the dollar index remained near an 18-month high ahead of key U.S. inflation reports. External risks also weighed on sentiment, with the IMF warning that geopolitical conflicts and energy supply disruptions pose challenges for oil-importing economies such as Indonesia. Locally, persistent food price pressures could keep inflation elevated through year-end, complicating Bank Indonesia’s efforts to support growth while stabilising the currency. Governor Destry Damayanti reaffirmed the central bank’s autonomy in setting interest rates despite closer coordination with the government, seeking to ease concerns over political interference. Meanwhile, forex reserves eased slightly in September but remained near a five-month high. However, a persistent current account deficit and tighter global financing conditions leave the rupiah exposed to shifts in foreign capital flows.
S. S. inflation reports. External risks also weighed on sentiment, with the IMF warning that geopolitical conflicts and energy supply disruptions pose challenges for oil-importing economies such as Indonesia.
Locally, persistent food price pressures could keep inflation elevated through year-end, complicating Bank Indonesia’s efforts to support growth while stabilising the currency. Governor Destry Damayanti reaffirmed the central bank’s autonomy in setting interest rates despite closer coordination with the government, seeking to ease concerns over political interference. Meanwhile, forex reserves eased slightly in September but remained near a five-month high. However, a persistent current account deficit and tighter global financing conditions leave the rupiah exposed to shifts in foreign capital flows.