Rupiah remains flat amid 'wait and see' approach ahead of FOMC meeting

The Rupiah exchange rate against the US Dollar closed slightly weaker by 2 points, or 0.01 per cent, at Rp17,696 per US Dollar at the close of trading on Wednesday, compared to the previous close of Rp17,694 per US Dollar.

Lukman Leong, an analyst at Doo Financial, stated that the flat movement of the Rupiah reflects a ‘wait and see’ attitude among investors ahead of the Federal Open Market Committee (FOMC) meeting.

“The Rupiah closed flat amidst a correction in the US Dollar index, US bond yields, and global crude oil prices. Investors tend to adopt a wait-and-see approach awaiting the results of the FOMC meeting tonight, which is expected to raise interest rates for the first time since July 2023,” he told ANTARA in Jakarta on Wednesday.

Reports suggest that the Federal Reserve has a strong potential to raise interest rates by 25 basis points (bps) during the FOMC meeting. Previously, the Federal Reserve maintained interest rates at their current range during the July meeting.

According to Leong, the correction in the US Dollar index, US bonds, and global crude oil prices is a natural occurrence ahead of specific agendas anticipated by investors.

“This is a natural correction ahead of anticipated events, involving adjustments, profit-taking, or bargain hunting,” Leong explained.

The Jakarta Interbank Spot Dollar Rate (JISDOR) from Bank Indonesia also weakened to the level of Rp17,712 per US Dollar from the previous level of Rp17,687 per US Dollar.