The Indonesian rupiah firmed below IDR 18,100 per U.S. dollar on Tuesday, recovering from losses in the prior two sessions, after S&P Global Ratings reaffirmed Indonesia’s investment-grade credit rating with a stable outlook.
The agency said fiscal and external strains, driven by higher oil prices and rupiah weakness, are likely temporary.
Bank Indonesia also lent support, having raised rates by 100 bps between May and June and vowing to use all tools to steady the currency.
Fiscal prospects improved as the House Budget Committee proposed trimming the 2027 budget for President Prabowo’s free meal program to boost efficiency.
Still, gains were capped by signs of softer domestic momentum, with oil prices staying elevated, consumer sentiment falling for a third month in June, and retail sales declining the most in three years.
On the global front, the U.S. dollar held firm ahead of key inflation data and Fed Chair Kevin Warsh’s first semiannual testimony before Congress.