Rupiah Sentiment Triggered by Falling Brent Crude Oil Prices

Jakarta (ANTARA) - Permata Bank Chief Economist Josua Pardede stated that sentiment towards the rupiah was triggered by Brent crude oil prices falling below US$73 per barrel. The rupiah exchange rate weakened by 45 points, or 0.25 percent, to Rp17,988 per US dollar on Friday morning, compared to the previous close of Rp17,943 per US dollar. “The decline in oil prices has eased concerns over Indonesia’s twin deficit risk,” he said in Jakarta on Friday. He explained that the drop in oil prices was driven by expectations of increased oil supply from the Middle East. As global oil prices weakened, yields on government securities (SBN) declined, helping to alleviate concerns over fiscal pressure. Benchmark government bond yields for 5-year, 10-year, 15-year, and 20-year tenors fell to 7.21 percent (-4 bps), 7.18 percent (-3 bps), 7.28 percent (-2 bps), and 7.24 percent (-4 bps), respectively. SBN trading volume increased to Rp24.91 trillion, up from Rp17.33 trillion in the previous session, reflecting heightened activity in the bond market. Meanwhile, foreign ownership of SBN rose by Rp160 billion to Rp875 trillion as of 24 June 2026, equivalent to 12.66 percent of total outstanding. On the global front, the headline US Personal Consumption Expenditures (PCE) index remained steady at 0.4 percent month-on-month in May 2026, lower than the market expectation of 0.5 percent. Annually, headline PCE inflation rose to 4.1 percent year-on-year from 3.8 percent, in line with market consensus, while core PCE inflation edged up to 3.4 percent year-on-year from 3.3 percent. The lower-than-expected monthly inflation realisation suggests short-term inflationary pressures are beginning to ease, slightly reducing concerns over persistent inflation in the United States. Additionally, the final estimate for US economic growth in the first quarter of 2026 was revised upwards to 2.1 percent quarter-on-quarter from 1.6 percent, indicating solid economic resilience. Based on these factors, the rupiah is forecast to move within a range of Rp17,900 to Rp18,025 per US dollar today.