FX.co ★ Rupiah Weakens as Political, Inflation Risks Mount

The Indonesian rupiah traded around IDR 17,720 per U.S. dollar on Wednesday, after briefly strengthening to about IDR 17,650 in the previous session. The currency came under pressure amid mounting caution over plans for a potentially large protest in Jakarta on Thursday, where demonstrators are urging parliament to swiftly pass the Asset Forfeiture Bill. Market participants also remained wary ahead of next week’s August inflation release, as El Niño-related risks heightened concerns over rising food prices. July trade data are likewise due, with the rupiah continuing to face persistent external headwinds and uncertainty surrounding global energy markets. Even so, downside pressures were limited by expectations of policy continuity under acting Governor Destry Damayanti, with Bank Indonesia seen maintaining its focus on currency stability. On the global front, the U.S. dollar held steady ahead of the latest U.S. PCE inflation report— the Federal Reserve’s preferred inflation gauge— and a speech by Fed Chair Kevin Warsh at the Jackson Hole symposium on Friday.