Rupiah Advances as Dollar Eases, BI Rate Decision in Focus
The Indonesian rupiah extended gains, hovering near IDR 18,000 per dollar on Tuesday as the dollar index slipped and traders weighed the Fed’s policy outlook ahead of its October meeting. Meanwhile, Bank Indonesia intensified stabilisation efforts under President Prabowo’s directive, with Governor Destry Damayanti noting that swap instruments and domestic DNDFs had attracted about US$8—8.5 billion in inflows to date. The central bank began its two-day policy meeting, with markets expecting rates to remain unchanged for a fourth straight month following cumulative rate hikes of 100bp since May. Concerns over MSCI’s potential reclassification of Indonesia to standalone market status next year eased after regulators proposed excluding stocks with highly concentrated ownership from benchmarks to improve price discovery. However, overall sentiment stayed fragile as elevated oil prices threatened fiscal conditions and inflationary pressures persisted amid rising food costs linked to El Niño.
The Indonesian rupiah extended gains, hovering near IDR 18,000 per dollar on Tuesday as the dollar index slipped and traders weighed the Fed’s policy outlook ahead of its October meeting. Meanwhile, Bank Indonesia intensified stabilisation efforts under President Prabowo’s directive, with Governor Destry Damayanti noting that swap instruments and domestic DNDFs had attracted about US$8—8.5 billion in inflows to date. The central bank began its two-day policy meeting, with markets expecting rates to remain unchanged for a fourth straight month following cumulative rate hikes of 100bp since May.
Concerns over MSCI’s potential reclassification of Indonesia to standalone market status next year eased after regulators proposed excluding stocks with highly concentrated ownership from benchmarks to improve price discovery. However, overall sentiment stayed fragile as elevated oil prices threatened fiscal conditions and inflationary pressures persisted amid rising food costs linked to El Niño.