FX.co ★ Rupiah Falls for 4th Session Amid Dollar, Oil Pressures

The Indonesian rupiah weakened toward IDR 17,700 per U.S. dollar on Tuesday, extending its decline for a fourth consecutive session as the U.S. dollar index strengthened ahead of this week’s Federal Reserve policy decision. Domestically, elevated oil prices have intensified inflation concerns after headline inflation accelerated to 3.19% in August. As a net oil importer, Indonesia remains exposed to higher global energy costs, which risk adding pressure to both inflation and the fiscal balance.

On the monetary policy front, Bank Indonesia is scheduled to meet next week, having kept its benchmark interest rate unchanged for a second straight month in August, following a cumulative 100 basis points of tightening since May. In fiscal policy, Suahasil Nazara was sworn in as the new finance minister, replacing Purbaya Yudhi in a surprise cabinet reshuffle—the third such change in less than two years. Suahasil has pledged to maintain budget discipline, including adherence to the 3% deficit cap, as external headwinds intensify from rising U.S. Treasury yields and oil prices holding above $100 per barrel.