FX.co ★ Rupiah Strengthens for 3rd Session Despite Weekly Loss Risk

The Indonesian rupiah strengthened to approximately IDR 16,825 per dollar on Friday, marking its third consecutive gain, following the central bank's decision earlier this week to maintain its key rate at 4.75% for the fourth consecutive meeting, consistent with market predictions. Policymakers emphasized currency stability in the face of global economic challenges. Governor Perry Warjiyo stated that the board is prepared to intervene significantly to support the rupiah, highlighting that foreign exchange reserves rose to a nine-month high in December 2025. Despite this, the currency is still on track for its first weekly decline in three weeks, as officials hint at the possibility of further monetary easing after a cumulative 150 basis point reduction between September 2024 and September 2025. The outlook remains supported by low inflation, which is expected to remain within the 1.5%–3.5% target range during 2026-2027. On the global stage, the dollar index experienced minimal change but is expected to face a weekly decline amid easing geopolitical tensions and anticipation that the Federal Reserve will maintain steady interest rates in the upcoming week.