Rupiah Faces Further Pressure Amid Fed Interest Rate Hike and Oil Price Decline
The Indonesian rupiah is facing further pressure following the Federal Reserve's decision to raise its benchmark interest rate by 25 basis points to 3.75-4.00 percent.
Josua Pardede, Head of Economics at Permata Bank, attributes this move to the Fed's hawkish stance, which aims to curb inflation driven by supply disruptions and geopolitical pressures.
The Fed officials expect the policy rate to be in the range of 4.00-4.25 percent by the end of 2026, as they continue to monitor inflation levels.
Meanwhile, oil prices are declining due to expectations that Saudi Arabia's main East-West crude pipeline may resume operations soon, after being damaged by drone attacks.
Josua predicts that the rupiah will move in the range of IDR 17,700 to IDR 17,850 per US dollar, taking into account these market developments.