Rupiah Closes Slightly Stronger, US Dollar Drops to Rp17,980

The rupiah continued its positive trend, closing slightly stronger against the US dollar in early-week trading. The Indonesian currency appreciated 0.06% to close at Rp17,980 per US dollar, marking its second consecutive day of gains. The rupiah’s strengthening narrowed from its opening position, having started the day with a 0.22% gain at Rp17,950 per US dollar before weakening by 30 points by the close. Throughout the day, the rupiah traded within a range of Rp17,950 to Rp17,995 per US dollar. This performance extended the positive momentum from the previous Friday, when the rupiah closed 0.47% stronger at Rp17,990 per US dollar. The US dollar index, which measures the greenback against a basket of six major currencies, weakened 0.12% to 99.793. The dollar remains under pressure following a joint intervention by Japan and the US in the foreign exchange market to support the yen. This intervention pushed the dollar index back below the 100 level, after it had fallen more than 1.5% the previous week. Domestically, market participants are assessing the latest inflation and trade data. The Central Statistics Agency recorded a monthly deflation of 0.14% in July, a reversal from the 0.44% inflation seen in June. On an annual basis, inflation eased to 2.88% from 3.34% the previous month, coming in lower than market consensus. Meanwhile, Indonesia’s trade balance remains in deficit, despite export values growing 8.8% year-on-year in June. The trade shortfall is seen as a factor limiting the rupiah’s further appreciation. These data points will be key considerations for Bank Indonesia in determining the future direction of monetary policy, alongside rupiah stability, global economic developments, and foreign capital flows.