FX.co ★ Rupiah Stays Soft, Still Logs Weekly Rise

The Indonesian rupiah weakened toward IDR 16,850 per US dollar on Friday, extending its recent decline as investors stayed cautious ahead of Bank Indonesia’s policy meeting next week. Market expectations for additional monetary easing persisted after a senior central bank official reiterated that there is still room to resume interest rate cuts, following a total of 150 basis points in reductions since September 2024.

At the same time, Finance Minister Purbaya Yudhi emphasized that fiscal policy remains geared toward supporting economic growth rather than managing short-term currency fluctuations, underscoring that exchange-rate stability falls under the central bank’s mandate. Despite the rupiah’s latest softness, the currency still posted a modest gain for the week, helped by Bank Indonesia’s Inflation and Food Prosperity Control Movement, which aims to bolster food supply and alleviate inflationary pressures.

Investors are now looking ahead to Indonesia’s fourth-quarter current account data, due next week, after the country recorded its first surplus in nearly two years in the third quarter. On the global front, the US dollar index was little changed for a fourth straight session, as markets awaited the release of US January CPI data later in the day for further clues on the Federal Reserve’s policy outlook.