Rupiah Strengthens Amid January Deflation, Trade Surplus Data

RRI.CO.ID, Jakarta - The rupiah strengthened at the opening of trading in Jakarta on Tuesday, February 3, 2026, rising 36 points, or 0.21 percent, to IDR 16,762 per USD from IDR 16,798 previously.

Permata Bank chief economist Josua Pardede said data released by the Central Bureau of Statistics (BPS) signaled easing short-term price pressures.

“The BPS inflation release indicates that short-term price pressures are easing, as January 2026 recorded monthly deflation of 0.15 percent, mainly driven by declining food prices such as red chili, bird’s eye chili, shallots, broiler chicken, and eggs,” Josua said in Jakarta on Tuesday, as quoted by Antara.

He said the report tended to calm markets as the risk of a near-term price spike had diminished.

At the same time, he added, the BPS data could limit further rupiah gains, as markets interpreted it as opening more room for looser interest rate policy going forward.

Annual inflation, however, remained at 3.55 percent, with the main contribution coming from housing, water, electricity, and household fuel, accounting for 1.72 percentage points. This indicates price normalization after seasonal factors rather than a complete disappearance of inflationary pressure.

Beyond inflation, Indonesia’s external fundamentals remain supported by a trade surplus. BPS recorded a USD 41.05 billion surplus for January–December 2025, with December alone posting USD 2.51 billion. The increase in foreign exchange supply from exports supported the rupiah.

“So, the BPS release earlier today did help shape sentiment, but its impact is usually more subtle, through changes in expectations about the direction of interest rates and perceptions of price stability, rather than acting as the main trigger for intraday movements,” Josua said.

From the global side, he added, stronger pressure came from movements in the USD, sharp declines in commodity prices, and caution ahead of key events this week.

“The USD strengthened briefly as gold and silver prices weakened, before its gains faded after European markets opened. Markets are also awaiting interest rate decisions from the European Central Bank and the Bank of England, US labor reports and various corporate earnings releases, prompting investors to quickly reduce risk,” Josua said. ***