The Indonesian rupiah hovered near IDR 17,650 per U.S. dollar on Friday, remaining below IDR 17,700 for a second straight session as the dollar weakened further after traders scaled back expectations for a Federal Reserve rate hike this month following dovish comments from a central bank official.
Meanwhile, Bank Indonesia Governor Destry Damayanti said domestic inflation remains under control and called for closer cooperation among the government, central bank, businesses, and economists to support economic growth.
Gains were tempered, however, by growing concerns that El Niño could disrupt food supplies and push up prices in the coming months.
Market caution also prevailed ahead of next week’s data releases, including August foreign exchange reserves, consumer confidence, and July retail sales, which could offer fresh clues on domestic demand and monetary policy.
Still, the rupiah was on track to strengthen for a fifth straight week, gaining around 0.25% so far.
