The Indonesian rupiah weakened around 16,500 per dollar on Thursday after the central bank unexpectedly slashed its key rates by 25bps to 4.75%. It was the sixth reduction since September 2024, lowering borrowing costs by a total of 150bps to the lowest level since late 2022. Bank Indonesia (BI) Governor Perry Warjiyo said Wednesday the board will continue to assess the scope for more cuts while balancing currency stability and economic growth. The rupiah has fallen about 2% against the US dollar this year, weighed by concerns over domestic finances, two weeks of protests since late August, and last week’s sudden dismissal of finance minister Sri Mulyani Indrawati. Questions also remain over the central bank’s independence following a “burden sharing” program to help fund government spending. Globally, the dollar index held above 97, extending a rebound after the Federal Reserve’s widely expected 25bps cut, with policymakers flagging two more reductions this year but just one in 2026.