2026.08.0507:16:30UTC+00Rupiah Strengthens After Q2 GDP Beats Forecasts

Indonesia’s rupiah strengthened to around IDR 17,930 per U.S. dollar on Wednesday afternoon, recovering after briefly nearing IDR 18,050 in the previous session. The currency drew support from a weaker U.S. dollar, as reports of a potential interim U.S.–Iran agreement to reopen the Strait of Hormuz sent oil prices sharply lower, easing inflation pressures and tempering expectations for further global interest rate hikes.

On the domestic front, sentiment improved after second-quarter GDP grew 5.29% year-on-year, exceeding forecasts even as it moderated from the first quarter. On a quarterly basis, output expanded 3.73%—the fastest pace in a year—rebounding from a 0.77% contraction in Q1. Inflation also eased to 2.88% in July, a three-month low and comfortably within Bank Indonesia’s target range.

However, the rupiah’s gains were limited by concerns over external balances, following a persistent trade deficit in June driven by a spike in crude oil imports. Market participants also remained cautious amid uncertainty over leadership at Bank Indonesia after the abrupt departure of Governor Perry Warjiyo, with investors awaiting President Prabowo’s nomination for his successor.