FX.co ★ Rupiah Strengthens After BI Stays Put for Third Time

The Indonesian rupiah strengthened to approximately IDR 16,680 per dollar by Wednesday afternoon, recovering from an earlier dip close to 16,710. This movement occurred after Indonesia's central bank decided to keep its benchmark interest rate steady at 4.75% for the third consecutive meeting, a decision that was broadly anticipated. Governor Perry Warjiyo stated this choice was made to maintain currency stability and improve the transmission of monetary policy. The central bank has previously reduced rates by a total of 150 basis points from September 2024 to September 2025 as a measure to stimulate economic growth. Recent data indicates the rate-cutting cycle is starting to show effects, with loan growth reaching a five-month peak of 7.74% in November, despite a high level of undisbursed facilities. Warjiyo emphasized that the authorities would continue evaluating the potential for additional rate cuts, as inflation is expected to remain within the target range of 1.5% to 3.5% next year, depending on recovery initiatives following a major disaster in Sumatra. Meanwhile, on the global stage, the dollar index made slight gains, as varied U.S. labor data did little to alter Federal Reserve policy expectations.