FX.co ★ Rupiah Finds Support Despite Lingering Economic Headwinds

The Indonesian rupiah strengthened, trading around IDR 18,130 per U.S. dollar on Tuesday after briefly touching IDR 18,200 in the previous session. Market sentiment improved following a larger-than-expected trade surplus in September, although imports grew at a faster pace than exports. Headline inflation eased slightly in October and remained within Bank Indonesia’s target range, even as food prices picked up due to El Niño-related supply disruptions. The manufacturing sector also showed signs of improvement last month, with solid gains in output, new orders, and export sales. Nonetheless, overall sentiment stayed cautious amid fiscal pressures from higher oil prices and Indonesia’s exposure to volatile export revenues and shifting external demand. Bank Indonesia reiterated its commitment to strengthening policy coordination with the government and maintaining a policy mix aimed at supporting the rupiah. On the global front, the U.S. dollar index was little changed as investors weighed geopolitical tensions and political uncertainty ahead of key U.S. labor-market data.