The currency stayed about 0.4% higher for the week as Q2 growth slowed to 5.29% and a weaker U.S. dollar, bond inflows, and July equity buying helped limit losses.
Indonesia's rupiah traded around IDR 17,900 per U.S. dollar on Thursday, slipping ahead of Bank Indonesia's July foreign exchange reserves release on Friday after touching IDR 17,835 in the prior session. Pressure on the currency came as second-quarter economic growth slowed to 5.29% year on year from 5.61% in Q1, with private consumption and government spending easing. The decline was cushioned by a softer U.S. dollar after an agreement to partially reopen the Strait of Hormuz weighed on oil prices, helping curb inflation concerns and reducing bets for more Fed tightening (more U.S. interest-rate hikes). Despite the pullback, the rupiah remained up about 0.4% for the week, supported by softer July inflation after government food stabilisation measures and the harvest season in parts of Java, along with foreign inflows into government bonds and overseas investors returning as net buyers of domestic equities in July.