02.09.202505:01:55UTC+00Rupiah Strengthens as Prabowo Moves to Calm Protests

The Indonesian rupiah experienced a recovery, improving to approximately 16,390 per dollar after hitting a low of nearly 16,490 last week, marking its weakest point in a month. This resurgence followed President Prabowo Subianto's announcement on Monday that political parties have agreed to reduce lawmakers' benefits in response to widespread protests, which have resulted in 10 fatalities, marking the most severe unrest the country has faced in decades. In response to the crisis, Prabowo postponed a visit to China and convened his cabinet on Sunday to address the pressing issues. Meanwhile, the United Nations has called for an inquiry into the reported excessive use of force by the authorities, as the protests were sparked by outrage over substantial benefits for lawmakers and what critics describe as extravagant policies amidst budget cuts. In addition, Bank Indonesia committed to stabilizing the rupiah through various measures, including foreign exchange intervention. Interestingly, the local currency's gains occurred even as the U.S. dollar index strengthened, with investors anticipating crucial U.S. labor data expected later in the week.