IDR Strengthens Amid Prabowo's Growth Target, Weaker USD
The Indonesian Rupiah (IDR) strengthened on Monday as President Prabowo's optimistic speech on Indonesia's economic growth prospects lifted sentiment. The president projected that GDP growth could reach 6% by next year, driven by ongoing investment realization and steady job creation.
In a bid to enhance fiscal credibility, the government plans to retain a portion of state-owned companies' dividends to construct a fiscal buffer and accelerate debt reduction.
The US Dollar (USD) depreciated alongside a broader decline in the USD, triggered by weaker-than-expected US economic data. July Retail Sales dropped 0.6% month-over-month, reversing June's 0.2% increase and missing the market consensus of 0.1% growth.
As a result, traders have scaled back their expectations for Federal Reserve rate hikes, with markets pricing in just a 30.1% probability of a rate hike next month, down from 52.2% estimated a week ago.