FX.co ★ Rupiah Downtrend Persists Ahead of Rate Decision

The Indonesian rupiah depreciated beyond 16,750 per dollar on Tuesday, experiencing its sixth consecutive session of losses as investors remained cautious prior to Bank Indonesia’s impending rate decision. The central bank is largely anticipated to maintain its benchmark rate at 4.75%, following a cumulative reduction of 150 basis points over the last year. Despite this expectation, Governor Perry Warjiyo suggested that modest inflation levels this year and next might allow for further rate cuts. He also mentioned that the current economic growth rate of around 5% is below Indonesia’s potential. President Prabowo Subianto aims to increase growth to 8% during his tenure. Since the beginning of the year, the rupiah has declined approximately 3.8% against the dollar, ranking among the weakest performers in emerging Asia. This downturn is attributed to a persistent current account deficit and declining prices for significant export commodities like coal and palm oil. On a global scale, the dollar index remained stable around 99.5, just ahead of several postponed U.S. economic data releases this week, including the non-farm payroll report for September.