Rupiah strengthens as US PPI comes in lower than expected

The rupiah exchange rate strengthened by 6 points, or 0.03 percent, to Rp17,980 per US dollar on Friday morning, compared to the previous close of Rp17,986 per US dollar. PermataBank Chief Economist Josua Pardede said the rupiah strengthened as the US Producer Price Index (PPI) was recorded lower than market expectations. “The PPI was recorded lower than market expectations, thus reinforcing the belief that inflationary pressures in the US continue to ease,” he said in Jakarta on Friday. Citing Anadolu, US producer prices unexpectedly declined in June 2026 for the first time in nearly a year, largely due to lower energy costs. This condition pushed the majority of Asian currencies to strengthen against the dollar, including the rupiah. In addition, geopolitical tensions in the Middle East are rising after Iran launched an attack on a US tanker near Iran’s oil export terminal. The US also carried out attacks on Iranian military assets, which then prompted Iran to launch missile attacks on US military bases in Kuwait and Jordan. Looking at economic data, US Retail Sales grew by 0.2 percent month on month (MoM) in June 2026, slowing compared to the previous month’s growth which was revised up to 1.0 percent MoM, and in line with market expectations. Based on these factors, the rupiah is expected to move in the range of Rp17,975–Rp18,100 per US dollar.