The Indonesian rupiah strengthened slightly to around 16,610 per dollar on Tuesday after dropping to 16,630 in the previous session, aided by a weaker US dollar as optimism surrounding a possible US-China trade deal eased safe-haven demand. Investors also expect the US Federal Reserve to cut interest rates by 25 basis points on Wednesday, while monitoring signals for another potential reduction in December. Domestically, Bank Indonesia recently paused its aggressive rate-cutting cycle to improve policy transmission, despite having already reduced its benchmark rate by 150 basis points since September last year. However, lending rates have only fallen by 15 basis points, a gap that Governor Perry Warjiyo attributed to depositors seeking higher returns. Annual inflation climbed to a 16-month high of 2.65% in September but stayed within the central bank’s 1.5%–3.5% target range, supporting market confidence.