Rupiah Holds Gains as BI Decision Looms

The Indonesian rupiah hovered near IDR 17,970 per dollar on Wednesday, extending strength for a third session as the US dollar remained under pressure after the dollar index fell to a three-week low. Softer US Treasury yields and lower crude oil prices reduced support for the greenback, helping lift emerging market currencies, including the rupiah. Traders awaited Bank Indonesia's policy decision later today, with markets widely expecting the central bank to hold its key rate at 5.75% for a fourth straight month following 100bps of cumulative tightening earlier this year. Sentiment was also aided by easing concerns over MSCI potentially reclassifying Indonesia as a standalone market, after regulators introduced measures to address concentrated share ownership and strengthen shareholder disclosure requirements. However, gains remained limited by risks from elevated oil prices, which could strain fiscal conditions, and rising inflationary pressures linked to El Niño-driven food costs.