Rupiah Heads for Third Weekly Loss as Monthly Decline Deepens

The Indonesian rupiah hovered near IDR 18,170 per U.S. dollar on Friday, remaining under pressure despite further easing in the dollar index after the U.S. Fed held interest rates steady earlier this week. Locally, Bank Indonesia Governor Destry Damayanti reaffirmed the central bank's focus on rupiah stability, saying the current benchmark rate remains sufficient to anchor inflation expectations. She added that any potential rate increase would depend on incoming data, following cumulative hikes of 100bps in May and June. Meantime, traders remained cautious ahead of next week's September trade and October inflation data. September inflation accelerated to a three-month high amid El Niño-related food price pressures. Elevated import and energy costs also heightened fiscal concerns amid Middle East tensions, keeping 10-year government bond yields near a 6-1/2-year high. The rupiah is set for the third straight weekly loss of around 1.1% and the second monthly fall of approximately 1.6%.