The Indonesian rupiah strengthened to around IDR 17,800 per U.S. dollar on Wednesday, extending its recent recovery as traders awaited Bank Indonesia’s policy decision. Markets expect the central bank to keep its benchmark rate at 5.75% for a third consecutive month after cumulative tightening of 100 basis points earlier this year. Policymakers are balancing currency stability and persistent domestic price pressures against economic growth, while a firm U.S. dollar and hawkish Federal Reserve signals have limited the rupiah’s gains. Annual inflation accelerated to 3.19% in August, partly because of higher food prices linked to El Niño-related supply disruptions, although lower oil prices eased imported-inflation and fiscal concerns. Bank Indonesia has also pledged to support orderly trading through foreign-exchange operations, including offshore and domestic NDFs, spot transactions and secondary-market bond purchases. Finance Minister Suahasil Nazara separately urged constructive debate over the statutory 3% deficit cap.