Jakarta. The rupiah strengthened further against the US dollar on Friday, supported by market sentiment after the government set a 6% economic growth target for 2027 and assumed an exchange rate of Rp17,500 per US dollar.

The rupiah closed at Rp17,827 per US dollar in the spot market as of 4 p.m. Jakarta time, gaining 50 points, or 0.28%, from the previous session, according to Bloomberg data. The currency had earlier strengthened 38 points, or 0.21%, to Rp17,839 per dollar.

The rupiah’s gains came after President Prabowo Subianto announced that the government is targeting a fiscal deficit of Rp 671.2 trillion, or 2.4% of gross domestic product, in the 2027 draft state budget. The government projects state revenue at Rp 3,426 trillion and expenditure at Rp 4,097.2 trillion.

“We understand that the ideal deficit is as small as possible. In fact, our aspiration is to have a balanced budget,” Prabowo said during a plenary session at the House of Representatives on Thursday.

He added that the projected deficit would be narrower than the Rp689.1 trillion, or 2.68% of GDP, deficit set in the 2026 state budget.

The government’s 2027 macroeconomic assumptions include 6% economic growth, 2.5% inflation, a 6.9% yield for 10-year government bonds and a rupiah exchange rate of Rp17,500 per US dollar.

The government also assumed an Indonesian crude oil price of $75 per barrel, oil lifting of 610,000 barrels per day and natural gas lifting of 984,000 barrels of oil equivalent per day.

Other major currencies also weakened against the rupiah on Friday, with the Singapore dollar at Rp13,932, the Japanese yen at Rp112.01, the Australian dollar at Rp12,609 and the euro at Rp20,589.

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