The Indonesian rupiah traded around IDR 17,530 per U.S. dollar on Thursday, after briefly strengthening to below IDR 17,450 in the previous session. Sentiment was pressured by concerns over Brent crude prices above USD 100 per barrel, which could strain Indonesia’s fiscal position as the country is a net oil importer. Even so, the rupiah found support from a more positive domestic outlook, extending its gains over the past week following the appointment of Destry Damayanti as the new governor of Bank Indonesia.
The external backdrop also lent some support, with foreign exchange reserves climbing in August to their highest level in five months, bolstering expectations that the country will maintain sufficient buffers in the near term. At the same time, domestic fundamentals improved: retail sales grew in July for the first time in four months. Authorities intensified efforts to contain food-price volatility after annual inflation quickened to 3.19% in August. On the global front, the U.S. dollar index was little changed as investors awaited key U.S. inflation data.
