World Bank Upgrade Boosts Rupiah and Indonesia’s 2026 Growth Outlook
The Indonesian rupiah appreciated against the US dollar on Tuesday, buoyed by softer US inflation data and an improved economic outlook for the country. The currency closed at Rp17,899 per dollar, up 18 points from the previous day's Rp17,917, according to market data.
Traze Andalan Futures Director Ibrahim Assuaibi noted that the rupiah strengthened despite ongoing geopolitical tensions in the Middle East, including conflicts between Yemen's government forces and Houthi militants. The weaker-than-expected US Personal Consumption Expenditures (PCE) inflation report for August also contributed to the rupiah's gains, reducing expectations of a Federal Reserve rate hike in late October.
The World Bank upgraded Indonesia's 2026 growth forecast by 0.5 percentage points to 5.2%, citing increased government priority programs, investment linked to state-owned entities, and substantial energy subsidies. The bank also highlighted stronger private consumption and higher public spending around the turn of the year, including the earlier timing of Ramadan and Idulfitri, as well as the disbursement of holiday allowances and 13th-month salaries.
As of 3:59 p.m. Jakarta time, Bloomberg data showed the rupiah trading at Rp14,001 per Singapore dollar, Rp113.14 per Japanese yen, Rp12,484 per Australian dollar, and Rp20,117 per euro.