02.11.202606:57:35UTC+00Rupiah Fails to Gain Ground After October Inflation Data

The Indonesian rupiah hovered around IDR 18,160 per U.S. dollar on the first trading day of November, struggling for a second consecutive week to strengthen beyond the 18,000 level amid broad dollar strength ahead of U.S. labor market data and the midterm elections. Domestically, food prices in October accelerated further, while headline inflation eased slightly but remained close to a three-month high. At the same time, imports continued to outpace exports despite a stronger-than-expected trade surplus in September.

To support the rupiah and attract foreign capital, Bank Indonesia has upheld a policy mix that includes spot market, DNDF, and NDF interventions, as well as bond purchases in the secondary market. Governor Destry Damayanti recently stated that the current benchmark interest rate is still sufficient to anchor inflation expectations, noting that any further adjustments would depend on incoming data. After delivering a cumulative 100 basis points of rate hikes in May and June, policymakers now face the challenge of balancing rupiah stability, inflation control, and economic growth.