FX.co ★ Rupiah Slips for 6th Session, Near April Lows

The Indonesian rupiah continued its decline for the sixth consecutive session on Friday, trading close to IDR 16,850 per dollar, marking its weakest point since late April 2025. This downturn was influenced by a stronger U.S. dollar, which saw the dollar index reach near one-month highs, fueled by expectations that the Federal Reserve will keep the interest rates steady in its next meeting. On the domestic front, sentiment was dampened by the potential for further monetary easing, as Bank Indonesia officials have repeatedly signaled the possibility of rate cuts this year to bolster economic growth. This comes despite a series of rate reductions totaling 150 basis points between September 2024 and September 2025, and rising cost pressures following the late-November disaster in Sumatra. Recent data also showed a decline in consumer confidence in December, following a nine-month high in November, marking its first decrease in three months. Additionally, market reactions were influenced by the 2025 budget deficit surpassing its target, which reflects increased government spending on stimulus measures. Weekly, the rupiah saw a decline of approximately 0.6%, reversing a previously modest gain.