Rupiah Strengthens Amid Fiscal Sentiment and BI Rate Support

The rupiah exchange rate showed positive performance in trading on Thursday, 11 June 2026. Based on market data, the rupiah strengthened slightly by 3 points or 0.02% to Rp17,941 per US dollar, compared to the previous closing position of Rp17,944 per US dollar. Permata Bank Chief Economist Josua Pardede stated that the rupiah’s strengthening today was driven by easing market concerns over Indonesia’s fiscal prospects. The decline in global oil prices and the government’s policy to adjust Pertamax fuel prices were deemed effective in reducing pressure on the national fiscal balance. Apart from domestic factors, the rupiah received support from Bank Indonesia’s monetary policy. The transmission of the BI rate hike announced a day earlier began to take effect, increasing the attractiveness of domestic asset yields for foreign investors. From the external side, market attention was focused on US inflation data. Headline US inflation in May 2026 was recorded rising to 4.2% year-on-year, triggered by a surge in energy prices of 23.5% due to tensions in the Middle East. However, on a month-on-month basis, US core inflation actually slowed to 0.2%, lower than market expectations of 0.3%. ‘This data indicates that inflationary pressure from energy prices is not as strong as feared. Investors have begun to slightly reduce expectations of aggressive Fed rate hikes this year,’ Josua explained. The combination of a more manageable fiscal deficit and slowing core inflation in the US provided room for the rupiah to remain stable. The rupiah is predicted to continue moving within a maintained consolidation range throughout the day. With improving fundamental conditions, the domestic bond market is also expected to receive a boost along with increasing investor confidence in Indonesia’s macroeconomic stability amid global uncertainty.