14.09.202604:20:11UTC+00Rupiah Weakness Persists Amid Surging Oil Prices

The Indonesian rupiah weakened toward IDR 17,650 per U.S. dollar on Monday, declining for a third consecutive session as the U.S. dollar index continued to firm ahead of the Federal Reserve’s upcoming policy meeting. The rupiah also came under pressure from a sharp rise in oil prices, which threatens to fuel inflation and strain Indonesia’s fiscal position as a net oil importer.

Inflation concerns intensified after headline consumer prices accelerated to 3.19% in August, despite government efforts to curb food-price volatility linked to the impact of El Niño. Even so, the rupiah’s losses were partly contained by policy reassurances from Bank Indonesia Governor Destry Damayanti, who reiterated that policy stability remains a central priority, underpinned by monetary, macroprudential, and payment-system measures as the core pillars of the central bank’s framework.

Bank Indonesia is scheduled to hold its next policy meeting next week, after leaving its benchmark interest rate unchanged for a second straight month in August, following a total of 100 basis points of rate hikes since May.