Rupiah Slides on Dollar Strength and Rising Inflation Fears

The Indonesian rupiah edged lower on Thursday to IDR 17,960 per US dollar, its first trading day in October. This decline comes as the dollar index hit an 18-month high and US Treasury yields rose to multi-year peaks.

Cautious sentiment lingered due to concerns that energy-driven inflation could keep policy tighter for longer.

Locally, inflation worries deepened after September's headline inflation accelerated to 3.28% yoy, a three-month high, driven by persistent food-price pressures amid El Niño effects.

Elevated crude prices added risks for Indonesia, a net oil importer, by raising import costs and fiscal pressure.