FX.co ★ Rupiah Firms Further

On Tuesday, the Indonesian rupiah remained steady around 16,655 per dollar, continuing its upward momentum from the previous session, bolstered by constant foreign capital inflows. This support followed Bank Indonesia's decision to maintain its policy rate at 4.75% for the second consecutive meeting, after implementing a total of 150 basis points in cuts since September 2024. Policymakers indicated that inflation remains moderate and is anticipated to remain within the 2.5% ±1% target for the remainder of 2025. Although fluctuations in food prices and seasonal transport costs may introduce temporary pressures, overall price increases are expected to be controlled. Contributing factors include modest wage growth and governmental measures aimed at stabilizing essential commodities such as rice and fuel. Despite this, the rupiah has depreciated approximately 3.6% against the dollar since the start of the year, with the central bank hinting at potential for further easing to boost economic growth, which it acknowledges is below potential. Indonesia's economy expanded by 5.04% in the third quarter of 2025, following a 5.12% increase in the second quarter, hindered by slower growth in private consumption. On a global scale, the dollar index remained subdued, hovering around 100, continuing its sideways movement for a fourth consecutive session.