Rupiah Slumps to Three-Week Low Amid Dollar Strength
The Indonesian rupiah continued to depreciate against the US dollar, reaching a low of IDR 17,780 per dollar on Wednesday. This marks the second consecutive day of losses for the currency, as the dollar index strengthened to a near three-week high.
The surge in oil prices has stoked inflation concerns and reinforced views of a less accommodative Fed stance, contributing to the dollar's rise. Locally, investors are cautious ahead of key domestic data releases next week, including August's forex reserves and consumer sentiment.
Domestic price pressures have picked up, with headline inflation accelerating in August from July's three-month low, driven by higher food prices. Core inflation has also hit its highest since March 2023.
However, a narrow trade surplus offered some support for the rupiah, with stronger non-oil and gas exports helping offset a surge in imports, particularly fuel. The confirmation of Destry Damayanti as Bank Indonesia governor has also raised hopes for a more optimistic economic outlook, with her projecting 5.2%-6% growth in 2027, marking the fastest pace since 2012.