FX.co ★ Rupiah Extends Gains on Dollar Weakness, Strong Domestic Fundamentals

The Indonesian rupiah hovered around IDR 18,050 per U.S. dollar on Tuesday, rising for a second consecutive session as the dollar index softened further and energy prices stabilised ahead of U.S. inflation data. The rupiah outperformed its regional peers, while most other Asian currencies traded within narrow ranges. Easing crude oil prices also helped reduce pressure on Indonesia’s import bill. Domestically, sentiment was supported by solid economic fundamentals, with the economy expanding 5.47% year-on-year in Q3. Consumer confidence climbed to a five-month high in October, and retail sales posted a third straight month of growth in September, though at a slower pace. At the same time, Bank Indonesia continued to intervene to smooth volatility in the currency market, and foreign exchange reserves inched higher in October. However, the rupiah’s gains were capped by caution over student-led protests in several major cities this week and by concerns about potential foreign outflows ahead of MSCI’s November review of Indonesia’s equity market.