Jakarta (ANTARA) – The Indonesian rupiah strengthen by 60 points, or 0.33 percent, to close at Rp17,888 per US dollar on Wednesday afternoon, compared with Rp17,948 in the previous session.Doo Financial Futures analyst Lukman Leong attributed the appreciation to easing investor concerns over Indonesia’s fiscal outlook.Lukman told ANTARA in Jakarta on Tuesday that positive sentiment toward Indonesia’s fiscal position grew after the government reported a budget deficit of 0.76 percent of GDP through June, while maintaining its 2026 budget deficit target below the 3-percent ceiling.State revenue has reached Rp1,459.4 trillion (approximately US$81.4 billion), accounting for 46.3 percent of the Rp3,153.6 trillion target set in the 2026 State Budget.This revenue performance was driven by increased economic activity, improved oversight and governance of taxes and customs, and enhanced services across ministries, government agencies, and public service agencies.Tax revenue was recorded at Rp1,187.8 trillion, or 44.1 percent of the Rp2,693.7 trillion target. This consisted of Rp1,035.7 trillion in tax collection (43.9 percent of the Rp2,357.7 trillion target) and Rp152 trillion from customs and excise (45.2 percent of the Rp336 trillion target).Meanwhile, non-tax state revenue stood at Rp271 trillion, or 59 percent of the Rp459.2 trillion target.Furthermore, state spending reached Rp1,656 trillion, representing 43.1 percent of the Rp3,842.7 trillion target,reflecting year-on-year (yoy) growth of 17.8 percent. Central government spending reached Rp1,298.6 trillion, representing 41.2 percent of the Rp3,149.7 trillion target.Ministry and agency spending reached Rp658.9 trillion, or 43.6 percent of the Rp1,510.5 trillion target, while non-ministry and agency spending stood at Rp639.7 trillion, or 39 percent of the Rp1,639.2 trillion target.Meanwhile, regional transfers stood at Rp357.4 trillion, representing 51.6 percent of the Rp693 trillion target. With these figures, the state budget recorded a deficit of Rp196.5 trillion, or 0.76 percent of GDP, while the primary balance recorded a surplus of Rp85.1 trillion.”Over the past few months, substantial foreign capital flowed out due to fears that the deficit could exceed 3 percent, with some even projecting it to reach 4 percent,” Lukman explained.Market sentiment was also driven by anticipation of a 25-basis-point interest rate hike at the upcoming Bank Indonesia (BI) Board of Governors meeting on Wednesday (July 22).Of note, the 50-basis-point increase in the BI-Rate in May 2026 marked the first adjustment after the benchmark rate remained at 4.75 percent since September 2025.However, the rupiah continued to depreciate, briefly breaking above the Rp18,000 per US dollar threshold in early June.Through its weekly meeting on June 9, the Board of Governors again increased the BI-Rate by 25 basis points, gradually bringing the rupiah back below Rp18,000 per US dollar.In the board's monthly meeting on June 18, BI continued its monetary tightening by raising the BI-Rate by another 25 basis points to 5.75 percent.