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Rupiah strengthens as S&P reaffirms Indonesia investment-grade rating
USD/IDR trades near 18,110 for the second straight session as Indonesia’s currency gains support from Bank Indonesia’s recent 100-basis-point rate hike.
FXStreet reports that USD/IDR slipped for a second consecutive day, trading around 18,110 during Asian hours on Wednesday as the Indonesian rupiah strengthened. The move follows S&P Global Ratings’ reaffirmation of Indonesia’s investment-grade credit rating with a stable outlook. S&P said recent fiscal and external pressures linked to elevated oil prices and rupiah depreciation are likely temporary, and the currency also found backing after Bank Indonesia implemented a 100-basis-point rate hike between May and June and said it would use all available monetary tools to stabilize the rupiah. The report also links the wider dollar trend to softer US inflation, with the US Consumer Price Index easing to 3.5% year-over-year in June from 4.2% in May, below the market’s 3.8% consensus. Separately, safe-haven demand could cushion the dollar, amid renewed US-Iran tensions after CENTCOM confirmed additional strikes, with the Strait of Hormuz handling nearly 20% of the world’s energy supply. FXStreet notes that CME FedWatch data shows markets pricing roughly a 50% chance of a Federal Reserve rate hike in September, while oil-price concerns tied to the renewed tensions continue to feed inflation worries and expectations for higher rates to persist.