Rully Nova, an analyst from Bank Woori Saudara, stated that the strengthening of the Indonesian rupiah is being influenced by U.S. inflation figures that came in lower than market expectations.

"Today, the rupiah is expected to continue appreciating against the U.S. dollar, supported by positive global sentiment—particularly the U.S. inflation rate, which was lower than projected, fueling optimism that the Federal Reserve may cut interest rates," he said in a statement to ANTARA in Jakarta on Thursday.

Citing data from Xinhua, U.S. inflation saw a slight increase in May 2025, with the Consumer Price Index (CPI) rising by 2.4 percent year-on-year (yoy), compared to 2.3 percent in April 2025. This increase fell just short of economists’ projections of 2.5 percent.

Core inflation also rose by 2.8 percent yoy, but it remained below the expected 2.9 percent.

In response to the CPI release, U.S. President Donald Trump promptly called on the Federal Reserve to cut interest rates by a full percentage point.

"The lower-than-expected inflation figure is largely due to the ongoing burden of import tariffs being absorbed by American producers, as well as abundant inventory levels," Rully explained.

On the domestic front, another factor supporting the rupiah is the consumer confidence report from Bank Indonesia (BI), which is expected to show improvement from previous levels.

"Several factors contributing to rising consumer confidence include government-issued economic stimulus and an increase in money supply. The index is projected to rise to 123 for May," he added.

In the opening session of Thursday morning’s trading in Jakarta, the rupiah strengthened by 8 points or 0.05 percent to IDR 16,252 per U.S. dollar, up from the previous rate of IDR 16,260 per dollar.