The Indonesian Rupiah weakened against the USD at the start of October 2024, approaching the IDR 15,200/USD mark again. According to Refinitiv data, the Rupiah closed at IDR 15,195/USD on Tuesday (1 October 2024), weakening by 0.4% from the previous close (30 September 2024). Concurrently, the US Dollar Index (DXY) rose to 100.943, marking a 0.16% gain, which exerted pressure on the Rupiah. Domestically, the Consumer Price Index (CPI) recorded a significant drop, registering a 0.12% month-on-month (mom) decrease in September 2024, marking the fifth consecutive month of deflation. Senior Economist Fithra Faisal Hastiadi from SSI Research attributes this trend to delayed rice harvests affecting food prices. However, this deflation indicates weakened consumer demand, potentially impacting Indonesia's economic growth outlook.
On the global front, the Rupiah's decline is further influenced by the US monetary policy stance. US Federal Reserve Chair Jerome Powell indicated that gradual rate reductions might continue but emphasized there is no urgency for rapid cuts, given the sustained growth of the US economy and steady consumer spending. Powell’s optimistic view of the US economy, supported by an upward revision of the Gross Domestic Income (GDI) data, makes the Rupiah vulnerable to the strengthening USD. Additionally, Indonesia's economic challenges are amplified by the Manufacturing PMI, which remains below 50, signaling contraction and adding pressure on the Rupiah. This situation suggests potential obstacles in achieving Indonesia's 5% growth target for the 2024 fiscal year.
