USD/IDR falls to 16,020 as Bank Indonesia holds rates at 5.75%, prioritizing currency stabilization over further hikes.
The Indonesian rupiah strengthened against the US dollar, with USD/IDR trading near 16,020 in Asian hours after Bank Indonesia (BI) kept its benchmark interest rate unchanged at 5.75%. The central bank opted for targeted currency stabilization measures instead of additional rate hikes to support the rupiah.
Prior to the decision, USD/IDR had risen over 0.5% the previous day. Analysts had anticipated potential tightening, but BI’s focus on fiscal health—including proposed defense spending cuts—helped ease pressure. However, rising global oil prices and Middle East tensions may limit further gains by fueling inflation.
Markets are pricing a 35.8% chance of a Fed rate hike this month, with an 82.1% probability of a quarter-point increase in September, according to the CME FedWatch tool.