Jakarta. Rupiah strengthened against the US dollar on Tuesday, supported by softer-than-expected US inflation data and improved expectations for Indonesia’s economic growth.

Rupiah closed at Rp17,899 per dollar, up 18 points from Monday’s Rp17,917, according to market data.

Traze Andalan Futures Director and currency analyst Ibrahim Assuaibi said the rupiah managed to strengthen despite continued geopolitical tensions in the Middle East, including ongoing clashes between Yemen’s internationally recognized government forces and Houthi militants.

“The rupiah managed to strengthen despite geopolitical tensions in the Middle East that have yet to ease,” Ibrahim said.

Rupiah also gained support after the US Personal Consumption Expenditures (PCE) inflation report for August came in below expectations, while previous figures were revised lower.

Weaker inflation and labor market data have reduced expectations of a Federal Reserve rate hike at its Oct. 27-28 meeting, Ibrahim said.

Domestically, the rupiah was supported by optimism over Indonesia’s economic outlook. The World Bank on Tuesday raised its 2026 growth forecast for Indonesia by 0.5 percentage point to 5.2%.

The World Bank attributed the stronger growth outlook to increased government priority programs, investment linked to state-owned entities and sizable energy subsidies.

Growth is also expected to reflect stronger private consumption and higher public spending around the turn of the year. Earlier timing of Ramadan and Idulfitri, the disbursement of holiday allowances and 13th-month salaries, as well as the accelerated rollout of the free nutritious meals program have brought government spending forward in the fiscal cycle.

Meanwhile, Bloomberg data as of 3:59 p.m. Jakarta time showed the rupiah at Rp14,001 per Singapore dollar, Rp113.14 per Japanese yen, Rp12,484 per Australian dollar and Rp20,117 per euro.

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