FX.co ★ Rupiah Steadies with Eyes on Forex Reserves

The Indonesian rupiah remained relatively stable on Tuesday, trading near 16,620 against the dollar, as market participants anticipated the release of November's foreign exchange reserve figures later this week. In October, the reserves had risen slightly, though they remained near a 14-month low, underscoring ongoing challenges from capital outflows and increased import payments. Key indicators showed that both headline and core inflation for November remained within the central bank's target range of 2.5% ±1%, suggesting steady demand and moderate inflationary pressures. Notably, Indonesia recorded its 66th consecutive monthly trade surplus in October; however, the surplus shrank to a six-month low, mainly due to exports declining more sharply than imports. Bank Indonesia has set a target to steer the rupiah toward 16,500 per dollar next year, possibly reaching 16,400, while emphasizing that there is still potential for further rate cuts following 150 basis points of easing over the past year. Meanwhile, on the international stage, the dollar index lingered around 99.4, having recently touched a two-week low, as expectations for a Federal Reserve rate reduction increased in response to weak U.S. manufacturing data.