Jakarta. Rupiah firmed on Thursday after the Federal Reserve lowered its benchmark rate to 3.50–3.75 percent, boosting appetite for emerging-market currencies.

The rupiah closed 12 points stronger against the US dollar after briefly gaining 20 points to Rp 16,676, compared to Rp 16,689 at Wednesday’s close.

Traze Andalan Futures Director Ibrahim Assuaibi said the Fed’s latest Summary of Economic Projections signaled that most officials expect the federal funds rate to hover around 3.4 percent next year. “This implies policymakers could cut rates by around 25 basis points next year,” he said in a written statement.

Ibrahim said that expectations of the Fed’s policy path will continue to guide the rupiah. For the longer term beyond 2028, Fed officials see the neutral rate settling near 3 percent.

The rupiah also found support after Fed Chair Jerome Powell said policymakers need time to assess how this year’s three rate cuts are filtering through the US economy. Powell added that officials will monitor incoming data ahead of the next meeting in January, with markets focused on the weekly Initial Jobless Claims due Thursday at 20:30 WIB.

Geopolitical sentiment also played a role. Tensions between the United States and Venezuela escalated after media reports said a tanker identified as Skipper was intercepted near Venezuelan waters in a coordinated operation involving the US Coast Guard, FBI, and the Department of Homeland Security.

“The seizure highlights potential disruptions to Venezuela’s oil exports and injects a new supply-risk premium into the market,” Ibrahim said.

Domestically, the rupiah strengthened even after the Asian Development Bank trimmed Indonesia’s 2025 growth outlook from 5 percent to 4.9 percent, and its 2026 forecast from 5.1 percent to 5 percent, below the government’s State Budget targets of 5.2 percent and 5.4 percent respectively for those years.