05.11.202506:03:13UTC+00Rupiah Dips for Third Session Amid Slower GDP and Fed Rate Jitters

The Indonesian rupiah depreciated to approximately 16,730 per U.S. dollar on Wednesday, marking its third consecutive decline as the U.S. dollar index remained above 100, its highest point since May. The strength of the dollar was supported by speculation that the Federal Reserve might maintain its current interest rates in December, following signals from officials urging caution over further rate reductions. On the domestic front, the Governor of Bank Indonesia, Perry Warjiyo, indicated potential for a future rate cut. It is anticipated that the central bank will reduce its benchmark interest rate by an additional 50 basis points by the end of March 2026, following a pause in October after cumulative rate reductions totaling 150 basis points since September 2024. From an economic data perspective, Indonesia's economy grew by 5.04% year-on-year in the third quarter of 2025, a slight deceleration from the 5.12% growth observed in the second quarter, which was the fastest rate in two years. This slowdown is attributed to the impact of U.S. trade policies on economic activity. On a quarterly basis, growth slowed to 1.43%, down from a significant 4.04% increase in the second quarter, which was the strongest expansion recorded in nearly five years.