2025.11.0306:54:33UTC+00Rupiah Slips as Dollar Strengthens

On Monday, the Indonesian rupiah weakened to approximately 16,650 per dollar following a period of relative stability the previous week. This decline was attributed to the strengthening of the US dollar, which remained near a three-month high after the Trump-Xi summit, which was intended to stabilize bilateral relations. In the United States, Federal Reserve Chair Jerome Powell cautioned that another interest rate cut in December was uncertain due to the ongoing government shutdown.

Domestically, Bank Indonesia indicated that there might be more room for monetary easing, citing the expectation that inflation would remain moderate through 2026. This comes despite a temporary increase in October's inflation to a 1.5-year peak of 2.86%, which remains within Bank Indonesia's target range of 1.5% to 3.5%. Previously, the central bank had paused its cycle of aggressive rate cuts in October, after reducing its benchmark rate by 150 basis points starting from September 2024. However, robust trade data from September offered some relief to the local currency; exports increased by 11.4% year-on-year, while imports rose at a more modest pace of 7.17%.