Indonesian Rupiah loses ground despite BI intervention

USD/IDR remains stronger for the second consecutive day, trading around 17,980 during Asian hours on Thursday. The currency pair appreciates as the Indonesian Rupiah (IDR) faces downward pressure, following statements from Bank Indonesia (BI) noting that the currency's trajectory remains consistent with its regional peers. To manage market volatility, the central bank reaffirmed its commitment to stabilizing the Rupiah through active interventions across spot markets as well as onshore and offshore non-deliverable forwards (NDFs). Meanwhile, Indonesia's foreign exchange reserves eased slightly in September, though they remained near a five-month high.

The International Monetary Fund (IMF) raised its 2026 growth forecast for Indonesia to 5.1%, up from an earlier projection of 5.0%. This upward revision is driven by measures designed to boost household consumption alongside an anticipated pickup in government spending. However, the IMF cautioned that ongoing geopolitical conflicts and energy supply risks could present headwinds for energy-importing economies like Indonesia.

The upside of the USD/IDR pair could be restrained as the US Dollar (USD) struggled while investors continued to evaluate the Federal Reserve’s (Fed) monetary policy outlook in the wake of stronger-than-expected inflation data.

The Bureau of Labor Statistics (BLS) reported on Wednesday that the US Consumer Price Index (CPI)—a broad measure of goods and services costs across the economy—climbed 0.6% month-over-month in September, bringing the 12-month headline rate to 3.7%. Both metrics came in higher than economists' forecasts of 0.6% and 3.6%, respectively. Meanwhile, core CPI (which strips out volatile food and energy components) advanced 0.3% for the month and rose 2.6% on an annual basis, exceeding market estimates of 0.2% and 2.5%.

This hotter-than-anticipated inflation report reinforced expectations for a potentially more hawkish Federal Reserve, bolstering arguments for an interest rate hike at the upcoming Federal Open Market Committee (FOMC) meeting on October 27–28. Following the data release, futures traders raised the probability of a rate hike at the late-October meeting to approximately 31.6%, according to CME Group’s FedWatch tool.

Technical Analysis:

In the daily chart, USD/IDR trades at 17,980, keeping a constructive bullish tone as spot holds above both the short-term and medium-term Exponential Moving Averages (EMAs). Price is trading above the nine-day EMA and the 50-day EMA, which suggests the recent recovery remains supported, while the 14-day Relative Strength Index (RSI) near 58 stays in positive territory without yet signaling overbought conditions.

On the downside, immediate support is located at the nine-day EMA at 17,944.20, with a deeper technical floor at the 50-day EMA around 17,872.47. As long as USD/IDR holds above these underlying demand zones, the near-term bias would likely stay tilted to the upside, though momentum readings hint that gains could moderate if price fails to extend decisively beyond the recent highs.