FX.co ★ Rupiah Firms Amid Weaker Dollar, New BI Governor’s Pledge

The Indonesian rupiah traded below IDR 17,700 per U.S. dollar on Thursday, strengthening for a second consecutive session as the U.S. dollar index extended its decline. The greenback came under pressure following a sharp rally in the yen amid speculation of Japanese intervention after authorities conducted a rate check.

On the domestic front, Destry Damayanti was sworn in on Wednesday as Bank Indonesia’s first female governor, pledging a responsive policy stance aimed at balancing stability and growth. She also revised the 2027 growth outlook higher to a range of 5.2%–6.0%, with the upper bound representing the fastest projected pace since 2012.

The rupiah also drew support from a narrow trade surplus in July, as stronger non-oil and gas exports helped offset a sharp increase in imports, particularly fuel. However, gains were tempered by investor caution ahead of next week’s releases of foreign exchange reserves and consumer confidence data.

At the same time, inflationary pressures have intensified. Headline inflation in August accelerated from July’s three-month low, driven by higher food prices, while core inflation climbed to its highest level since March 2023.