19.12.202508:18:18UTC+00Rupiah Weakening Persists for 3rd Session

The Indonesian rupiah slipped to approximately IDR 16,750 per dollar on Friday, continuing its decline for the third consecutive session and approaching its lowest point in a month. This downward pressure is largely attributed to the central bank's dovish approach, despite having implemented total interest rate cuts of 150 basis points from September 2024 to September 2025. Earlier in the week, the central bank decided to maintain the key interest rate at 4.75% for a third consecutive meeting. However, they indicated potential for further rate reductions, citing mild inflation and the necessity to bolster economic growth following a recent disaster in Sumatra. Thus far this year, the rupiah ranks among the weakest currencies in Asia, having depreciated approximately 4% against the U.S. dollar. In efforts to stabilize the financial market, the Indonesian government has mandated that exporters of natural resources retain all foreign exchange earnings within state-owned banks for at least a year starting on January 1, with the conversion limited to 50%. This regulation has faced criticism from certain groups due to concerns about liquidity, as current policies permit deposits to be made in any domestic bank. On a global scale, the U.S. dollar index remained steady around 98.4, concluding the week with minimal changes.