The Indonesian rupiah eased to around IDR 17,850 per U.S. dollar on Tuesday, after a subdued session the previous day. Market sentiment stayed cautious as Bank Indonesia began its two-day policy meeting, with the rate decision due on Wednesday. The central bank is widely expected to leave its benchmark rate unchanged under acting Governor Destry Damayanti, following a cumulative 100 bps of hikes between May and June aimed at supporting the currency.
Attention also turned to the upcoming Q2 current account data due later this week, after the Q1 deficit widened to its largest level since 2019 on the back of weaker trade performance.
Downside pressure on the rupiah was partly offset by fiscal optimism, after President Prabowo projected solid GDP growth for next year and the government pledged to build a stronger fiscal buffer and shore up investor confidence. Externally, the dollar index slipped to a near two-month low as traders scaled back expectations of additional Federal Reserve tightening this year amid softer U.S. economic data.
