Rupiah strengthens to Rp17.930 on BI-Rate at 5.50 percent
Markets see the rate increase as drawing foreign interest, even as the dollar stays firm after stronger-than-expected U.S. PPI data.
The rupiah on Friday morning strengthened 59 points, or 0.33 percent, to Rp17.930 per U.S. dollar from the previous close of Rp17.989 per U.S. dollar. The gain came after markets reacted positively to Bank Indonesia's decision to raise the benchmark rate to 5.50 percent. According to ICDX research, the move helped sustain market optimism and increase interest in domestic assets. At the same time, external pressure has not eased. The U.S. dollar remained stronger after the June 11 release of U.S. Producer Price Index data showed inflation higher than expected, reinforcing expectations that Federal Reserve rates will stay elevated for longer. Markets are also watching United States-Iran negotiations for their potential impact on oil prices and Indonesia's foreign-exchange needs.