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Indonesian rupiah firms as Fed uncertainty pressures the dollar
USD/IDR was around 18,120 during Asian trading, with markets pricing a 30.5% chance of an immediate Fed hike and a 76.6% probability of a September increase.
The Indonesian rupiah gained ground against the US dollar, with USD/IDR turning lower after two straight sessions, trading around 18,120 during Asian hours on Wednesday, according to FXStreet.
FXStreet said the move reflects pressure on the dollar ahead of the Federal Reserve policy decision. While a rate hold is the base case, traders are pricing an unusually high 30.5% chance of an immediate rate hike, and a 76.6% probability of a rate increase in September.
FXStreet also noted potential support for USD/IDR could be limited by Indonesia-specific headwinds. The article pointed to the surprise resignation of Bank Indonesia Governor Perry Warjiyo on Monday, which prompted fresh concerns about the central bank’s institutional independence and weighed on Indonesian assets.
The report added that a separate SMRC survey this month found President Prabowo Subianto’s approval rating has slipped to barely 50%, down from 81.2% in November and 66.4% in March, adding to investor caution as markets weigh broader “risk on” versus “risk off” dynamics.