Rupiah weakens amid market "wait and see" ahead of US CPI data release

Jakarta (ANTARA) - The rupiah exchange rate closed lower on Friday’s trading by 14 points or 0.08 percent to Rp17,104 per US dollar from the previous close at Rp17,090 per US dollar.

Research and Development Indonesia Commodity & Derivatives Exchange (ICDX) Muhammad Amru Syifa stated that the rupiah’s weakening was influenced by the market’s wait-and-see stance ahead of the US Consumer Price Index (CPI) inflation data release.

“Although it briefly appreciated to Rp17,083 at the start of the session, external pressures still dominated, particularly due to the strengthening US dollar ahead of the US inflation data release,” he told ANTARA in Jakarta on Friday.

The US CPI data is expected to rise, thereby strengthening expectations of tighter monetary policy and supporting the US dollar’s appreciation.

In addition, he continued, geopolitical tensions in the Middle East and potential disruptions to global energy distribution have increased demand for safe-haven assets, further pressuring the rupiah.

Looking at domestic sentiment, Bank Indonesia (BI) interventions are said to be the main support in maintaining exchange rate stability amid global pressures.

He stated that Senior Deputy Governor Destry Damayanti emphasised that stabilising the rupiah is a priority, with intervention measures in the spot market and non-deliverable forward (NDF), as well as readiness to purchase government bonds in the secondary market.

“Meanwhile, Bank Indonesia Governor Perry Warjiyo told the House of Representatives (DPR) that the central bank is consistently maintaining rupiah stability, including through interventions in the domestic NDF and offshore markets,” said Amru.

The Bank Indonesia Jakarta Interbank Spot Dollar Rate (JISDOR) on Friday also moved lower to Rp17,112 per US dollar from the previous Rp17,082 per US dollar.