TEMPO.CO, Jakarta - Indonesia's rupiah weakened against the U.S. dollar in Thursday morning trading, falling 94 points, or 0.53 percent, to Rp17,856 per dollar from the previous close of Rp17,762.
Rully Nova, an analyst at Bank Woori Saudara, attributed the rupiah's decline to hawkish signals from the U.S. Federal Reserve following its latest monetary policy meeting.
"The rupiah is expected to weaken in the range of Rp17,730 to Rp17,810 today, influenced by global factors, particularly the Federal Reserve's decision to keep interest rates unchanged and its hawkish stance indicating that rates will remain higher for longer," Rully told Antara on Thursday.
He said the Fed's outlook had diminished market expectations for a rate cut this year and helped push the U.S. Dollar Index above the 100 level.
According to Anadolu, the Federal Reserve decided to maintain its benchmark interest rate at 3.5–3.75 percent.
The decision marked the first Federal Open Market Committee (FOMC) meeting chaired by Kevin Warsh as Federal Reserve chairman, as policymakers grapple with persistent inflation risks, energy supply disruptions, and geopolitical uncertainty stemming from tensions in the Middle East.
The Fed also reiterated its commitment to maintaining adequate reserves within the banking system, saying the policy would help support price stability.
Domestically, market sentiment is also being shaped by expectations that Bank Indonesia will leave its benchmark interest rate unchanged at its Board of Governors Meeting later on Thursday.
"Bank Indonesia is expected to hold its policy rate this afternoon, although there may still be room for a rate increase next month," Rully said.
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