The rupiah edged lower toward IDR 17,860 per U.S. dollar on Monday after briefly strengthening below IDR 17,810, pressured by broad dollar strength ahead of the monthly U.S. jobs report later this week.
Locally, focus is shifting to June inflation after headline figures quickened to 3.08% in May, nearing the upper end of Bank Indonesia’s 1-1/2%–3-1/2% target range on rising food and energy costs.
Support from exports has waned, with April’s trade surplus narrowing to its smallest since 2020.
Meanwhile, concerns over governance and transparency persisted after the government included a controversial provision in new legislation granting blanket legal immunity for purchases of bonds issued by state investment fund Danantara.
Still, losses were cushioned by a scaled-back version of President Prabowo’s flagship spending program, underscoring fiscal discipline.
Simultaneously, manufacturing activity in May stabilized following a brief contraction, and bank lending stayed resilient.