FX.co ★ Indonesian Rupiah Slides to One-Month Low

The Indonesian rupiah has depreciated to approximately 16,450 per USD, reaching its lowest point in a month. This decline coincides with the U.S. dollar index remaining near a two-month peak, influenced by the Federal Reserve's hawkish stance. Despite holding interest rates steady for the fifth consecutive meeting in July, Federal Reserve Chair Jerome Powell emphasized that it is premature to discuss rate cuts, leaving future monetary easing uncertain. In recent developments, Indonesia has consented to eliminate tariffs on over 99% of U.S. goods and reduce non-tariff obstacles for American companies. In return, the United States has committed to reducing proposed tariffs on Indonesian products from 32% to 19% and has promised greater market access for these goods. Simultaneously, foreign direct investment into Indonesia experienced a year-on-year decline of 6.95% in the second quarter of 2025. This represents the sharpest drop in nearly five years and is attributed to global economic uncertainties, tighter financing conditions, and reduced export competitiveness. Additionally, Bank Indonesia has reiterated its commitment to stabilizing the rupiah through market interventions, aligning with economic fundamentals.