The Indonesian rupiah weakened beyond IDR 18,000 per U.S. dollar on Tuesday, ending a four-session winning streak as renewed concerns over the country’s external balance weighed on sentiment. Pressure mounted after Indonesia recorded another trade deficit in June, driven largely by a jump in crude oil imports amid elevated global energy prices. Investor anxiety also increased ahead of Wednesday’s release of Q2 GDP data, with economic growth expected to moderate from the robust 5.6% year-on-year expansion in Q1.
Nonetheless, the rupiah’s decline was contained after July inflation eased to a three-month low of 2.88%, remaining comfortably within Bank Indonesia’s 1–3.5% target band. Market participants also kept a close watch on President Prabowo’s forthcoming nominations for the next Bank Indonesia governor, following the abrupt departure of Perry Warjiyo. Finance Minister Purbaya Yudhi has reportedly ruled himself out of contention for the role. On the global front, the U.S. dollar held steady as investors continued to gauge the outlook for Federal Reserve policy amid ongoing uncertainty surrounding the conflict in the Middle East.
