FX.co ★ Rupiah Extends Losses Amid Firmer Dollar

The Indonesian rupiah weakened toward IDR 17,780 per U.S. dollar on Wednesday, declining for a second straight session as the dollar index climbed to a near three-week high. The greenback’s strength was underpinned by surging oil prices, which heightened inflation concerns and reinforced expectations of a less accommodative stance from the Federal Reserve.

On the domestic front, investors turned cautious ahead of key data releases due next week, including August foreign exchange reserves and consumer sentiment figures. Inflationary pressures also intensified at home: headline inflation accelerated in August from July’s three-month low, driven by rising food prices, while core inflation reached its highest level since March 2023.

Even so, the rupiah found some support from a modest trade surplus, as stronger non-oil and gas exports helped offset a sharp rise in imports, particularly fuel.

In a separate development, Parliament confirmed Destry Damayanti as governor of Bank Indonesia, making her the first woman to lead the central bank. She upgraded the country’s 2027 growth forecast to a range of 5.2%–6%, with the upper bound representing the fastest expansion since 2012.