Rupiah Nears Record Low Amid Dollar Strength and Outflow Risks
The Indonesian rupiah remained under pressure, hovering around IDR 18,170 per U.S. dollar on Wednesday and approaching its July record low of IDR 18,280. A firm dollar index ahead of the Fed’s rate decision weighed on the currency, alongside concerns over potential foreign fund outflows amid uncertainty surrounding Indonesia’s MSCI status. Fiscal worries further weighed on the rupiah as the government considered free education through university, potentially straining the budget following other costly commitments. External risks persisted despite a recent trade surplus, with elevated imports and energy costs leaving the economy vulnerable to Middle East uncertainty. Markets are eyeing next week’s trade data and inflation figures for fresh signals. Annual inflation accelerated in September, reflecting food-price pressures linked to El Niño. Still, Bank Indonesia said the rupiah’s movements were in line with regional peers and reaffirmed its market interventions to support the currency.
The Indonesian rupiah remained under pressure, hovering around IDR 18,170 per U.S. dollar on Wednesday and approaching its July record low of IDR 18,280. A firm dollar index ahead of the Fed’s rate decision weighed on the currency, alongside concerns over potential foreign fund outflows amid uncertainty surrounding Indonesia’s MSCI status. Fiscal worries further weighed on the rupiah as the government considered free education through university, potentially straining the budget following other costly commitments.
External risks persisted despite a recent trade surplus, with elevated imports and energy costs leaving the economy vulnerable to Middle East uncertainty. Markets are eyeing next week’s trade data and inflation figures for fresh signals. Annual inflation accelerated in September, reflecting food-price pressures linked to El Niño. Still, Bank Indonesia said the rupiah’s movements were in line with regional peers and reaffirmed its market interventions to support the currency.