Jakarta. Rupiah strengthened on Wednesday after Bank Indonesia maintained its benchmark BI-Rate at 4.75 percent.

The local currency closed 43 points higher against the US dollar at Rp 16,708, extending its earlier gain of 45 points from Tuesday’s close of Rp 16,751.

Ibrahim Assuaibi, Director at Traze Andalan Futures, said the decision aligned with market expectations, adding that BI also kept the Deposit Facility rate at 3.75 percent and the Lending Facility rate at 5.50 percent.

“The move is consistent with BI’s outlook that inflation in 2025 and 2026 will stay within the 2.5 percent ±1 percent target band, while supporting efforts to maintain rupiah stability amid persistent global uncertainty,” he said.

Ibrahim added that the rupiah also found support from external factors, including the delayed release of the US non-farm payrolls report due to a government shutdown. Markets are now watching for signs of labor market strength and wage pressures in the US.

“Weaker-than-expected data may strengthen expectations of a Federal Reserve rate cut,” Ibrahim said, noting that such developments could influence the rupiah’s trajectory.

Federal Reserve officials have recently signaled caution over additional rate cuts, while markets face renewed uncertainty after US President Donald Trump selected his nominee for the next Fed Chair.

The rupiah was also affected by sentiment surrounding US sanctions on Russia’s major energy producers Rosneft and Lukoil.

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