FX.co ★ Rupiah Halts 3-Day Decline

The Indonesian rupiah strengthened towards 16,680 per dollar on Tuesday, marking a recovery from a three-day downward trend after briefly surpassing 16,700. This support was bolstered by Bank Indonesia's reaffirmation of confidence in the external sector, highlighting robust exports and stable foreign inflows. The central bank maintained its policy rate at 4.75% in November for the second consecutive meeting, following a series of 150 basis point cuts since September 2024. Their current focus remains on currency stability and effective policy transmission. Additional support for the rupiah came from a rise in consumer confidence for the second consecutive month, reaching a nine-month high in November, spurred by increased year-end cash handouts. However, the currency’s gains faced limitations as traders adopted a cautious stance ahead of the anticipated release of October's retail sales data after five months of growth. Meanwhile, inflation risks persist due to logistics disruptions caused by late-November floods and landslides in Sumatra. Internationally, the dollar index remained stable as investors awaited the Federal Reserve’s final policy meeting of the year.