Rupiah gains toward third straight weekly rise

The Indonesian rupiah strengthened to around IDR 17,720 per U.S. dollar on Friday, extending its recent gain and heading for its third successive weekly advance as the dollar index lingered near multi-month lows amid doubts over the U.S.

Treasury’s bond buyback plan.

Locally, sentiment was buoyed by robust credit growth, which accelerated to 13.58% yoy in July, surpassing Bank Indonesia’s 8—12% target for end-2026.

Meanwhile, at its first policy meeting under acting Governor Destry Damayanti, the central bank reaffirmed its commitment to currency stability, holding the benchmark rate at 5.75% for a second month after 100bps of hikes since May.

However, gains were capped by external risks, as a record current account surplus in Q2 was accompanied by a persistent trade gap following a surge in oil imports driven by the Middle East war.

Potential El Niño-driven food inflation also underscored lingering price pressures, even as headline inflation hit a three-month low of 2.88% in July.