FX.co ★ Rupiah Dips Around 16,780 in Thin Year-End Trade

The Indonesian rupiah experienced a decline, reaching approximately IDR 16,780 per dollar on Monday, marking its third consecutive session of weakening amid sluggish year-end trading. Investor sentiment remained cautious due to Bank Indonesia's dovish stance, despite its decision to maintain the key interest rate at 4.75% for the third consecutive meeting in mid-December. This decision followed a cumulative 150 basis points reduction over the past year. Indonesian officials hinted at the possibility of further monetary easing to support economic growth, particularly in light of a significant disaster in Sumatra. Additionally, market players exercised caution ahead of the release of crucial economic data, including December's inflation figures and November's trade data. In 2025, the rupiah stands as one of Asia's weakest currencies, having depreciated by approximately 4.3%. In terms of policy, the central bank will phase out the Jakarta Interbank Offered Rate and adopt the Indonesian Overnight Index Average (Indonia) from January 1 to enhance transparency and align with international standards. Meanwhile, the dollar index remained under pressure, hovering near its lowest levels since early October, as markets anticipated interest rate cuts in the United States next year.