FX.co ★ Rupiah Eases Amid Dollar Strength, Inflation Concerns

Indonesia’s rupiah inched lower, trading around IDR 17,960 per U.S. dollar on Thursday, the first session of October, after briefly reaching 17,930 in the previous day’s trade. Market sentiment remained cautious as the dollar index climbed to an 18‑month high and U.S. Treasury yields advanced to multi‑year peaks, amid fears that energy‑driven inflation could force central banks to keep policy tighter for longer. Domestically, inflation concerns intensified after September’s headline rate quickened to 3.28% year-on-year, a three‑month high, driven by persistent food price pressures linked to El Niño. Elevated crude oil prices further heightened risks for Indonesia—a net oil importer—by increasing import costs and straining the fiscal balance. Even so, stronger‑than‑expected August trade data offered some support, although imports expanded far more rapidly than exports. At the same time, Bank Indonesia continued to shore up liquidity and support rupiah stability through secondary‑market bond purchases and a combination of spot, DNDF, and offshore NDF interventions.