Indonesian Rupiah receives support ahead of BI policy decision

USD/IDR falls as the Indonesian Rupiah finds support ahead of Thursday's Bank Indonesia policy decision.
Traders expect the BI to hike interest rates by 25 basis points to 5.75%.
US Dollar declines amid easing safe-haven demand following a preliminary US-Iran MoU to end the war.

Akhtar Faruqui FXStreet

USD/IDR inches lower after opening at a bullish gap, remaining in the positive territory and trading around 17,880 during the Asian hours on Thursday. The currency pair breaks lower as the Indonesian Rupiah (IDR) finds support ahead of Bank Indonesia’s (BI) policy meeting on Thursday.

Traders are actively pricing in the possibility of a 25-basis-point interest rate hike to 5.75%, building on momentum from last week when BI delivered a surprise 25-basis-point increase. That unexpected move was aimed squarely at defending the Rupiah and taming accelerating inflationary pressures, as the country's annual inflation rate jumped to 3.08% in May from 2.42% in April, closing in on the upper limit of the central bank's 1.5% to 3.5% target range.

The USD/IDR pair holds losses as the US Dollar (USD) slips on easing safe-haven demand following the BBC report late Wednesday, indicating that the White House confirmed that US President Donald Trump and Iranian President Masoud Pezeshkian signed a preliminary memorandum of understanding designed to end the US-Israel war on Iran. This decisive executive action follows the electronic signing of the initial framework by US Vice President JD Vance and Iranian Parliamentary Speaker Mohammad Bagher Ghalibaf earlier in the week.

However, the US Dollar could rebound on rising odds of rate hikes by the Federal Reserve (Fed) later this year. The Fed’s June Summary of Economic Projections showed half of FOMC members expect at least one rate hike this year. Despite economic disruptions linked to the conflict in Iran, resilient labor market data and persistent underlying inflation measures continue to drive tightening pressures.

US Dollar Price Last 7 Days

The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the weakest against the Australian Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	IDR
USD		0.16%	0.42%	0.03%	1.14%	-0.44%	0.05%	0.00%
EUR	-0.16%		0.27%	-0.11%	0.97%	-0.71%	-0.06%	-2.04%
GBP	-0.42%	-0.27%		-0.38%	0.71%	-0.98%	-0.37%	0.00%
JPY	-0.03%	0.11%	0.38%		1.11%	-0.55%	0.16%	0.03%
CAD	-1.14%	-0.97%	-0.71%	-1.11%		-1.63%	-0.93%	-1.27%
AUD	0.44%	0.71%	0.98%	0.55%	1.63%		0.63%	1.27%
NZD	-0.05%	0.06%	0.37%	-0.16%	0.93%	-0.63%		-1.03%
IDR	0.00%	2.04%	0.00%	-0.03%	1.27%	-1.27%	1.03%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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