Indonesian Rupiah slips due to stronger US Dollar, soaring oil prices
USD/IDR gains ground for the third successive day, trading around 17,700 during the early European hours on Monday. The pair appreciates as the US Dollar (USD) gains support amid aggressive Federal Reserve (Fed) rate-hike bets for Wednesday’s decision following hotter US inflation reports.
The Indonesian Rupiah has lost value due to a stronger US Dollar and rising oil prices. During Monday's early European trading hours, the USD/IDR pair climbed to approximately 17,700, as the US Dollar gained support from predictions of a Federal Reserve rate increase at Wednesday's decision following higher US inflation reports.
The US Consumer Price Index (CPI) surged in August, suggesting the likelihood of a quarter-point interest rate hike at the Federal Reserve's September meeting. Meanwhile, soaring oil prices, mainly driven by a drone attack that halted a main Saudi pipeline, have pressured the Indonesian Rupiah, as Indonesia is a net oil importer.
The USD/IDR pair's rise comes as Indonesia struggles with the impact of the spike in oil prices, which could exacerbate inflation and strain Indonesia's fiscal position.
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