FX.co ★ Indonesian Rupiah Inches Up, Set for Second Weekly Gain

The Indonesian rupiah inched higher to around IDR 17,830 per U.S. dollar by midday Friday, snapping a three-day losing streak and putting the currency on track for a second consecutive weekly gain.

Support for the rupiah was buoyed by President Prabowo’s Independence Day address to parliament, in which he forecast that GDP growth could reach 6% by the end of the year, underpinned by ongoing investment realization and job creation. The government also signaled plans to reclaim a portion of dividends from state-owned enterprises to build a fiscal buffer and accelerate debt reduction, a move that could enhance fiscal credibility.

Market attention is now turning to Bank Indonesia’s policy meeting next week, its first since Perry Warjiyo stepped down last month. Acting Governor Destry Damayanti, currently the sole nominee to head the central bank, is widely expected to ensure policy continuity. Bank Indonesia has lifted its policy rate by 100 basis points since May to support the rupiah.

Externally, the U.S. dollar remained subdued after softer U.S. inflation data led traders to pare back expectations of a Federal Reserve rate hike in September.