FX.co ★ Rupiah Advances Modestly, on Track for Second Weekly Rise

The Indonesian rupiah hovered near IDR 17,875 per U.S. dollar on Friday, rebounding after touching IDR 17,930 in the previous session. The currency found support from a softer U.S. dollar and easing U.S. Treasury yields, following strong demand at a 30-year bond auction. Domestically, August retail sales recorded their fastest growth in five months, underpinned by ongoing government measures to shield households from persistent cost pressures.

At the same time, foreign exchange reserves held close to a five-month high in September, though continued Bank Indonesia intervention and uncertain portfolio inflows remain potential sources of vulnerability. Inflation risks also stayed in focus, with September’s reading accelerating to a three-month high and food prices expected to remain a major driver of upward pressure through the end of the year. Separately, analysts see the trade surplus staying modest, constrained by firm import demand and weak export performance. For the week, the rupiah was set to post a gain of about 0.1%, marking its second consecutive weekly advance.