The Indonesian rupiah traded around IDR 17,850 per U.S. dollar on the final trading day of September, advancing for a second consecutive session after Bank Indonesia reiterated its commitment to consistent and sustainable market interventions and noted that the rupiah’s performance remained broadly in line with regional currencies. The central bank has adjusted its intervention strategy, reducing its share of spot-market operations to about 30% and placing greater emphasis on non-deliverable forwards (NDFs). Sentiment was further supported by improved fiscal visibility after Parliament approved the 2027 Budget Bill.
Upside for the rupiah was limited, however, as the U.S. dollar index stayed firm on the back of persistent U.S. inflation and hawkish Federal Reserve rhetoric. The rupiah is on track for a monthly decline of roughly 0.6%, weighed down by domestic price pressures after headline CPI accelerated to 3.19% year-on-year in August, driven by higher food costs linked to El Niño. External headwinds also remain, with elevated crude oil prices posing fiscal risks for energy-import-dependent Indonesia.
Even so, the rupiah is set to post gains for the quarter, up about 0.6% so far and clawing back part of the 5.7% loss recorded in the previous quarter.
