Stronger-than-expected Q2 GDP growth and easing inflation bolster the Rupiah, though structural risks cap further gains.
The Indonesian Rupiah remained below the 18,000 level against the USD, supported by softer global oil prices and a stronger-than-expected Q2 GDP print. Growth reached 5.3% year-on-year, exceeding Bloomberg’s consensus of 5.1%, driven by resilient domestic demand and investment activity.
In the first half of 2024, the economy expanded 5.5%, slightly below the government’s full-year target range of 5.6-6.0%. July inflation eased to 2.9% year-on-year, the lowest in three months, nearing the midpoint of Bank Indonesia’s 1.5-3.5% target range.
Market confidence in policy continuity was reinforced by reports that Acting Governor Destry Damayanti is the frontrunner to replace outgoing BI Governor Perry Warjiyo. Parliament is set to review nominations after its recess ends on 14 August.