Indonesia’s annual inflation rose to 3.34%, exceeding forecasts and nearing Bank Indonesia’s target ceiling, supporting the Rupiah.
The USD/IDR pair traded around 17,980 in Asian hours, trimming earlier gains as Indonesia’s June inflation accelerated to 3.34%, up from 3.08% in May. The print surpassed the Reuters poll estimate of 3.20% and approached the upper bound of Bank Indonesia’s 1.5%-3.5% target range.
Core inflation climbed to 2.76%, beating both the prior 2.59% and the forecasted 2.6%. Monthly inflation rose 0.44%, outpacing expectations of 0.3%. Meanwhile, the S&P Global Manufacturing PMI fell to 46.9, signaling contraction for the second time this year.
The US Dollar’s strength, driven by safe-haven demand amid stalled US-Iran talks, kept the pair elevated despite the inflation data.