FX.co ★ Rupiah Sustains Losses After Key Data

On Monday, the Indonesian rupiah weakened further, reaching approximately IDR 16,750 per dollar. This movement occurred as the U.S. dollar index climbed to a two-week high. Investors assessed the repercussions of U.S. military actions in Venezuela and prepared for significant U.S. economic data slated for release this week. The sentiment around the rupiah was further influenced by Bank Indonesia's dovish stance, as the central bank maintained the key interest rate at 4.75% for the third consecutive meeting in December, after 150 basis points of cuts in the previous year. December saw signs of rising inflation, with headline inflation reaching a 20-month high at 2.92% and core inflation peaking at a seven-month high; however, both figures remained within the central bank's target range of 1.5% to 3.5%, which reduces the pressure to increase rates. On the trade side, November’s trade surplus fell short of expectations, as exports experienced their most significant decline in nearly two years due to subdued global demand and elevated U.S. tariffs. Nonetheless, some losses were offset by a rise in foreign exchange reserves to a three-month high in November, marking the second consecutive monthly increase.