Jakarta. The rupiah strengthened past the Rp 18,000-per-dollar threshold on Thursday as investors took comfort in Bank Indonesia's reaffirmation of its independence, while softer-than-expected US inflation data eased pressure on emerging-market currencies.

The rupiah closed at Rp 17,986 per US dollar, strengthening 82 points, or 0.45%, from Wednesday's close of Rp 18,068.

Ibrahim Assuaibi, director of Traze Andalan Futures, said the rupiah gained after Bank Indonesia stressed its institutional independence following S&P Global Ratings' latest assessment of Indonesia's sovereign credit profile.

The central bank's independence had previously come under scrutiny in reviews by Moody's and Fitch Ratings.

External sentiment also supported the rupiah after US producer prices unexpectedly fell 0.3% in June from the previous month, compared with expectations for no change. The data followed softer US consumer inflation figures released earlier this week.

"The report reinforced signs that underlying price pressures are easing and reduced expectations of an imminent Federal Reserve rate hike," Ibrahim said in a statement on Thursday.

However, market sentiment remained cautious as renewed tensions between the US and Iran pushed crude oil prices higher for a fourth consecutive session.

"The latest escalation has revived concerns that higher energy costs could fuel future inflation, potentially limiting the Federal Reserve's room to ease policy despite the recent cooling in price pressures," Ibrahim said.

The rupiah strengthened even as the Fed maintained a hawkish stance. Fed Chair Kevin Warsh reiterated this week that policymakers remain committed to bringing inflation back to the central bank's 2% target.

According to Bloomberg data at 3:59 p.m. Jakarta time, the Singapore dollar traded at Rp 13,954, the Japanese yen at Rp 110.93, the Australian dollar at Rp 12,587, and the euro at Rp 20,622.