FX.co ★ Rupiah Nears 17,000 as Central Bank Independence in Focus

The Indonesian rupiah edged closer to the 17,000 per dollar threshold on Tuesday, marking a record low. This decline was driven by renewed apprehensions regarding the independence of the central bank, following President Prabowo Subianto's nomination of his nephew to the board of governors at Bank Indonesia. Market attention has also turned to the upcoming policy decision expected on Wednesday, as the board meeting commenced today. It is widely anticipated that borrowing costs will remain steady at 4.75%, although there is some speculation about potential further easing to bolster growth momentum. The central bank has already implemented a total of 150 basis points in cuts from September 2024 to September 2025 in response to mild inflation. Looking ahead, investors are keenly awaiting the Q4 GDP figures due in early February, as the growth rate had decelerated to 5.04% year-on-year in Q3 from 5.12% in Q2, reflecting weaker consumption despite government stimulus efforts. On the global stage, the dollar index dipped below 99, amidst concerns regarding U.S. assets, as tensions between Washington and Europe rose following President Trump's suggestion to purchase Greenland.