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Rupiah slips ahead of Bank Indonesia decision as USD/IDR edges up
USD/IDR was around 17,960 and traders priced a 25-basis-point BI rate hike to 6.0%.
USD/IDR rose slightly during Asian hours Wednesday, after a six day winning streak, as the Indonesian rupiah struggled ahead of a Bank Indonesia policy decision due later in the day, FXStreet reports.
The central bank is widely expected to lift its key interest rate by 25 basis points to 6.0%, after cumulative tightening of 100 basis points in May and June aimed at supporting the currency.
FXStreet also said Indonesia is stepping up inflation control efforts after June inflation landed at the upper end of Bank Indonesia’s 1.5% to 3.5% target range, with Finance Minister Purbaya Yudhi pointing to fiscal resilience including a stable sovereign outlook and a manageable deficit.
The outlet added that broader USD support could increase risk aversion amid escalating US Iran geopolitical tensions, while the report noted the Fed has entered its FOMC blackout period ahead of next week’s meeting and that CME FedWatch pricing shows more than 71% odds of at least a 25 basis point hike at the September meeting.