Rupiah Extends Winning Streak as Dollar Retreats

2026-07-16 05:29 By Farida Husna 1 min. read

The Indonesian rupiah firmed to around IDR 18,000 per U.S.

dollar on Thursday, strengthening for a third session as the U.S.

dollar eased further after softer U.S.

inflation reduced bets of an imminent Fed rate hike.

Locally, sentiment was underpinned by government plans to intensify measures to stabilise food prices and curb inflation amid El Niño-related supply risks.

In June, annual inflation accelerated, moving closer to the upper end of Bank Indonesia's 1-1/2%-3-1/2% target band.

However, gains were capped by elevated crude oil prices, which renewed concerns over the import bill.

Traders also stayed cautious as higher non-subsidized fuel costs, weak factory activity, and worries over household income and spending clouded the growth outlook.

Focus now shifts to Bank Indonesia's policy meeting next week, with markets watching whether officials maintain their tightening bias after 100bp of rate hikes during May and June, as declining forex reserves continue to weigh on the currency.



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Rupiah Extends Winning Streak as Dollar Retreats
The Indonesian rupiah firmed to around IDR 18,000 per U.S. dollar on Thursday, strengthening for a third session as the U.S. dollar eased further after softer U.S. inflation reduced bets of an imminent Fed rate hike. Locally, sentiment was underpinned by government plans to intensify measures to stabilise food prices and curb inflation amid El Niño-related supply risks. In June, annual inflation accelerated, moving closer to the upper end of Bank Indonesia's 1-1/2%-3-1/2% target band. However, gains were capped by elevated crude oil prices, which renewed concerns over the import bill. Traders also stayed cautious as higher non-subsidized fuel costs, weak factory activity, and worries over household income and spending clouded the growth outlook. Focus now shifts to Bank Indonesia's policy meeting next week, with markets watching whether officials maintain their tightening bias after 100bp of rate hikes during May and June, as declining forex reserves continue to weigh on the currency.
2026-07-16
Rupiah Slips as Oil Gains Stoke Import Cost Worries
The Indonesian rupiah dipped to around IDR 18,080 per U.S. dollar on Wednesday after briefly firming below IDR 18,000 in the prior session. The decline came as persistent gains in crude oil prices renewed pressure on the rupiah by heightening concerns over Indonesia's energy import bill as a net oil importer. Traders also turned cautious ahead of Bank Indonesia's policy meeting next week after policymakers raised rates by a total of 100 bps between May and June to defend the currency. The central bank is expected to remain vigilant as forex reserves stayed near a two-year low despite a slight gain in June. At the same time, concerns over weaker domestic activity in Q2 mounted amid sluggish manufacturing and slower consumer spending after higher non-subsidized fuel prices. Still, losses were capped as the dollar index eased further after softer U.S. inflation data reduced bets of a near-term Fed rate hike. Additional support came after S&P affirmed Indonesia's investment-grade rating.
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Rupiah Strengthens After S&P Affirms Indonesia's Credit Rating
The Indonesian rupiah firmed below IDR 18,100 per U.S. dollar on Tuesday, recovering from losses in the prior two sessions, after S&P Global Ratings reaffirmed Indonesia’s investment-grade credit rating with a stable outlook. The agency said fiscal and external strains, driven by higher oil prices and rupiah weakness, are likely temporary. Bank Indonesia also lent support, having raised rates by 100 bps between May and June and vowing to use all tools to steady the currency. Fiscal prospects improved as the House Budget Committee proposed trimming the 2027 budget for President Prabowo’s free meal program to boost efficiency. Still, gains were capped by signs of softer domestic momentum, with oil prices staying elevated, consumer sentiment falling for a third month in June, and retail sales declining the most in three years. On the global front, the U.S. dollar held firm ahead of key inflation data and Fed Chair Kevin Warsh’s first semiannual testimony before Congress.
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