The Indonesian rupiah traded around IDR 17,870 per US dollar on Thursday, largely unchanged from the previous session, as the dollar index stabilized ahead of July US PPI data that could offer further insight into inflation dynamics and the Federal Reserve’s policy path.
On the domestic front, fiscal discipline remained in the spotlight after the government reiterated its commitment to keeping the 2026 budget deficit below 3% of GDP, supported by a more than 23% year-on-year surge in tax revenues in January–July, highlighting stronger revenue collection. The 2027 draft budget, due to be presented on Friday, is expected to maintain a consumption-led policy stance.
Political and market attention also shifted toward the leadership transition at Bank Indonesia, with President Prabowo nominating Aida Budiman as senior deputy governor and putting forward Destry Damayanti as the sole candidate to replace outgoing governor Perry Warjiyo. Next week’s BI policy meeting—the first since Warjiyo’s departure—follows a cumulative 100 bps of rate hikes in May–June aimed at supporting the rupiah. With July inflation easing to a three-month low of 2.88%, policymakers may now have more space to consider any additional tightening with greater caution.
