USD/IDR Price News: Indonesian rupiah remains offered on mixed CPI

Indonesia’s annual inflation rate decelerated further in August, according to the latest data published by Statistics Indonesia on Tuesday.

Indonesian August’s inflation rate dropped to 1.32% on the year, compared with July’s 1.54% and 1.40% expectations and remained much below the Bank Indonesia’s (BI) 2.5-4.5% target range. The annualized core figure arrived at 2.03% vs. 2.07% previous and 2.00% expected.

Meanwhile, the monthly inflation reading for August came in at -0.05% vs. +0.01% expected and -0.1% last.

About Indonesia’s CPI

The Inflation index released by the Statistics Indonesia is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of the Indonesian Rupiah is dragged down by inflation. The CPI is used as a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as positive (or bullish) for the Rupiah, while a low reading is seen as negative (or Bearish).

USD/IDR reaction 

The USD/IDR cross is off the daily highs but trades with mild gains on the mixed Indonesian CPI data. The Indonesian rupiah remains undermined by the worrisome coronavirus situation and weak fundamentals.

At the press time, the spot trades 0.22% higher at 14,590, having hit a daily high at 14,615.