USD/IDR rises to 18,140 as domestic political turmoil in Indonesia coincides with stronger-than-expected US inflation data, lifting December Fed rate hike expectations to 91%.
The pair trades around 18,140 as the Rupiah is hit by political instability: Vice President Gibran offered to resign after a Supreme Court ruling invalidated his high school equivalency certificate, raising impeachment risk. At the same time, October US CPI beat forecasts (0.4% m/m vs 0.3% expected), pushing Fed rate-hike odds for December to about 91% and strengthening the Dollar. Both legs push USD/IDR higher.
The USD/IDR pair trades at 18,140 as the Indonesian Rupiah faces pressure from domestic political instability following Vice President Gibran Rakabuming Raka's offer to resign. Simultaneously, the US Dollar gains strength after October CPI data showed a 0.4% monthly increase, pushing the probability of a December Federal Reserve rate hike to approximately 91%.
Two forces line up: the Indonesian Rupiah is under pressure from political instability after the Vice President offered to resign, and the US Dollar is supported by stronger-than-expected October inflation that lifted December Fed rate-hike odds to about 91%.
Bank Indonesia actively stabilizes the currency through rate policy and its triple-intervention framework in the spot, derivative (DNDF) and government bond markets, plus tools like SRBI to attract capital inflows.