FX.co ★ Rupiah Dips But Heads for Sixth Straight Weekly Gain

The Indonesian rupiah weakened beyond IDR 17,600 per US dollar on Friday, extending its decline into a second session as the US Dollar Index held recent gains ahead of the latest US consumer price index release later in the day.

On the domestic front, fiscal concerns persisted amid global crude prices staying above USD 100 per barrel, intensifying pressure on Indonesia’s public finances given its position as a net oil importer. Inflation risks also remained elevated, even as authorities ramped up efforts to contain food price volatility following an acceleration in annual inflation to 3.19% in August.

Despite the recent softness, the rupiah is still on track for a sixth consecutive weekly gain, up around 0.1% so far this week, supported by an improving external backdrop as foreign exchange reserves climbed to a five-month high in August.

Meanwhile, newly appointed Bank Indonesia Governor Destry Damayanti emphasized that policy stability will be her key priority, with monetary, macroprudential, and payment-system policies serving as the core pillars of the central bank’s policy framework.