May inflation surged to 3.08%, exceeding expectations and supporting the IDR after it hit a record low against the USD.
The Indonesian Rupiah rebounded from a record low of 18,021 against the USD, trading near 17,900 after May inflation data surpassed forecasts. Annual headline inflation accelerated to 3.08%, up from April’s 2.42% and above the 2.97% consensus, remaining within the central bank’s 1.5%-3.5% target range.
Core inflation rose to a three-month high of 2.59%, while month-over-month consumer prices climbed 0.28%, outpacing the 0.14% estimate. The S&P Global Manufacturing PMI also improved to 50.0, signaling stable factory activity, though export challenges persist due to Middle East shipping disruptions.
The government’s plan to enhance tax collection via a state-owned exporter added further support to the currency, which had faced repeated lows earlier this year.