FX.co ★ Rupiah Eases After Trade and Inflation Data

The Indonesian rupiah slipped to around IDR 17,840 per US dollar on Tuesday, easing after holding steady in the previous two sessions. The currency came under pressure from a stronger US dollar index and cautious market sentiment amid escalating tensions in the Middle East. Domestically, new data showed that Indonesia’s trade surplus narrowed more than expected in April to its smallest level in six years, as import growth slightly outpaced exports and weakened support from external balances. At the same time, headline inflation accelerated in May, with higher energy costs linked to geopolitical risks feeding through into domestic prices, though inflation still remained within Bank Indonesia’s 1.5%–3.5% target range. Persistent fiscal pressures and continued capital outflows weighed on the rupiah despite Bank Indonesia’s mid-May rate hikes and other currency-stabilisation measures. Additional concerns arose over tighter foreign-exchange retention requirements for exporters, even as the government maintained that a newly established state-owned commodity trading company could help boost fiscal revenues and strengthen dollar liquidity.