28.10.202506:00:41UTC+00Rupiah Gains Slightly Amid Softer Dollar

On Tuesday, the Indonesian rupiah experienced a slight appreciation against the US dollar, reaching approximately IDR 16,610 per dollar, after previously registering at IDR 16,630. This movement occurred as the US dollar index decreased to its lowest in a week, buoyed by optimism surrounding a potential trade agreement between the United States and China, which in turn diminished the demand for the US dollar as a safe-haven currency. Meanwhile, the Federal Reserve is anticipated to announce a 25 basis point reduction in interest rates on Wednesday, with market participants closely observing for any indications of further adjustments in December.

On the domestic front, Bank Indonesia took an unexpected stance by halting its aggressive rate-cutting strategy last week, opting instead to enhance policy transmission. Despite the central bank reducing its benchmark interest rate by 150 basis points since September of the previous year, lending rates have only decreased by 15 basis points. Governor Perry Warjiyo attributed this discrepancy to depositors' demands for higher returns. In the realm of economic indicators, Indonesia recorded a rise in annual inflation rates to 2.65% in September, marking a 16-month peak. Nevertheless, the inflation rate remains within the central bank's target range of 1.5% to 3.5%, thereby sustaining market confidence.