Rupiah Finds Support Despite Lingering Economic Headwinds

The Indonesian rupiah firmed, hovering around IDR 18,130 per U.S. dollar on Tuesday after briefly touching IDR 18,200 in the prior session. Sentiment improved amid a stronger-than-expected September trade surplus, though imports grew faster than exports. Meanwhile, headline inflation eased slightly in October, remaining within Bank Indonesia's target range despite accelerating food prices amid El Niño-related supply disruptions. Indonesia's manufacturing sector also improved last month, with output, new orders, and export sales posting robust growth. However, overall sentiment remained cautious amid fiscal pressures from higher oil prices and exposure to volatile export earnings and shifting external demand. BI has reiterated its commitment to enhancing policy coordination with the government while maintaining a policy mix to support the rupiah. Globally, the dollar index steadied as traders assessed geopolitical risks and political uncertainty while awaiting U.S. labor-market data.