BI Vows Stronger Rupiah Support as Fed Leaves Rates Unchanged

The Indonesian rupiah strengthened slightly after Bank Indonesia (BI) promised to take stronger measures to support the currency. The rupiah hovered around IDR 18,060 per US dollar on Thursday, up from its previous day's high of IDR 18,100.

This move came after the US Federal Reserve left interest rates unchanged, with three voting members dissenting in favor of a rate hike. This division within the central bank led to a weakening of the greenback, which in turn helped stabilize the rupiah.

Bank Indonesia Governor Perry Warjiyo's sudden exit had previously sent markets into turmoil, but BI has now reassured investors with its commitment to a broad policy mix beyond interest rates. This includes spot FX intervention, non-deliverable forwards (NDFs), and the issuance of SRBI (rupiah-denominated securities) to manage liquidity and attract foreign inflows.

Traders are now looking ahead to key domestic releases next week, including July inflation data, May trade figures, and Q2 GDP numbers. These releases will provide fresh insights into the economic outlook and policy path.