FX.co ★ Rupiah Weakens Ahead of Key Data Amid Firm Dollar

The Indonesian rupiah weakened beyond IDR 17,950 per U.S. dollar on Monday, giving up earlier gains as a stronger greenback dampened risk appetite. The dollar index hovered near a two-month high, supported by rising oil prices that reinforced expectations of further Federal Reserve tightening and amplified geopolitical concerns.

Domestically, sentiment was cautious ahead of key data releases due later this week, including August trade figures, September inflation, and manufacturing indicators. A central bank official noted that the rupiah remained under pressure from robust foreign-exchange demand by importers and continued portfolio outflows from local assets.

Even so, losses in the currency were limited by Bank Indonesia’s broad-based interventions across offshore NDFs, the domestic spot market, and DNDFs. Policymakers last week left the benchmark interest rate unchanged at 5.75% for a third consecutive month, following a cumulative 100 basis points of hikes since May. At the same time, authorities continued coordinated measures to contain food price pressures after a recent uptick in headline inflation.