FX.co ★ Rupiah Steadies Ahead of BI Rate Decision

On Wednesday, the Indonesian rupiah exhibited minimal fluctuation, remaining close to 16,730 per dollar, as market participants anticipated the central bank's impending decision on monetary policy. It is broadly anticipated that Bank Indonesia will maintain its benchmark interest rate at 4.75%, following October’s policy stance, after implementing a series of rate cuts totaling 150 basis points over the past year to bolster economic growth initiatives. President Prabowo Subianto has set a target to elevate economic growth to 8% during his tenure, a notable increase from the approximately 5% growth rate before the pandemic. Nonetheless, Governor Perry Warjiyo highlighted that lending rates have only slightly decreased by about 15 basis points, indicating banks' cautious approach and depositors' preference for higher yields. The rupiah has depreciated approximately 3.8% against the US dollar so far this year, positioning it as one of the weaker currencies in emerging Asia. On the international stage, the US dollar index remained stable, hovering around 99.6, amid reduced expectations for an imminent Federal Reserve interest rate cut due to persistent inflation concerns, as investors looked to upcoming critical US economic data for further guidance.