FX.co ★ Rupiah Recovers but Heads for Weekly Losses

The Indonesian rupiah strengthened on Friday, trading near IDR 18,200 per U.S. dollar after recent declines had pushed it close to its record low of IDR 18,279. Market sentiment improved following comments from a Bank Indonesia official, who said the central bank would remain active in the market to support currency stability and ensure the rupiah reflects its underlying fundamentals ahead of next week’s policy meeting. Confidence was further supported by government assurances that economic activity remains normal despite Vice President Gibran Rakabuming’s resignation this week. Even so, the rupiah is on track for a weekly loss of about 1.1%, erasing earlier gains. Selling pressure has been partly driven by anticipated fund outflows of around IDR 1.2 trillion ahead of the Nov. 30 implementation of MSCI’s latest index review, which removed two Indonesian constituents while retaining seven. On the global front, the U.S. dollar hovered near a 19‑month high, buoyed by stronger‑than‑expected U.S. inflation data and hawkish Federal Reserve comments that reinforced expectations of tighter monetary policy.