FX.co ★ Rupiah Falls to Lowest Since April

The Indonesian rupiah weakened to approximately 16,600 per dollar on Monday, marking its lowest level since late April. This decline followed an unexpected decision by Bank Indonesia to reduce its benchmark interest rate by 25 basis points to 4.75% last week. This move represents the sixth rate cut since September 2024, cumulatively decreasing borrowing costs by 150 basis points to their lowest point since the end of 2022. Governor Perry Warjiyo stated that the currency's movement against the dollar remains manageable and assured that the central bank would continue its efforts to stabilize the rupiah through market interventions. Despite these assurances, the rupiah has depreciated by about 3% this year, impacted by domestic financial concerns and recent protests resulting in 10 fatalities. Meanwhile, Indonesia's 2026 budget has undergone a revision less than two weeks after Purbaya Yudhi Sadewa succeeded Sri Mulyani Indrawati as the Finance Minister. The updated budget reflects increased spending, slightly enhanced revenues, and a more relaxed fiscal approach, with the deficit approaching the 3% of GDP limit. In other markets, the dollar index climbed above 97.7 for the fourth consecutive session as investors awaited signals from the Federal Reserve and key US inflation data.