Jakarta, CNBC Indonesia \u2014 The rupiah strengthened against the US\ndollar throughout this week, tracking the movement of most Asian\ncurrencies which were supported by a weaker dollar.<\/p>\n
Based on Refinitiv data, the rupiah closed 0.31% stronger at\nRp17,685\/US$ on Friday trading (21\/8\/2026).<\/p>\n
The strengthening marked the rupiah\u2019s third consecutive day of gains.\nThe position of Rp17,685\/US$ was also the strongest closing level in\nnearly three months, or since 22 May 2026.<\/p>\n
On a weekly basis, the rupiah recorded a gain of 0.76%. The Garuda\ncurrency was among nine Asian currencies that managed to strengthen\nagainst the US dollar throughout the week.<\/p>\n
The rupiah\u2019s strengthening was supported by domestic sentiment after\nBank Indonesia maintained its benchmark interest rate at 5.75% in the\nBoard of Governors Meeting for the period of 18-19 August 2026.<\/p>\n
BI also maintained the Deposit Facility rate at 4.75% and the Lending\nFacility rate at 6.50%. The decision was aimed at maintaining rupiah\nstability amid global uncertainty while supporting economic growth.<\/p>\n
Of the 10 Asian currencies, nine managed to strengthen against the US\ndollar throughout the week. Only the Philippine peso moved in the\nopposite direction and ended in negative territory.<\/p>\n
The South Korean won led gains with a surge of 2.17% to KRW\n1,385.8\/US$.<\/p>\n
The won\u2019s rise came as the market assessed the policy direction of\nthe Bank of Korea (BOK). In July, the South Korean central bank raised\ninterest rates for the first time in around three and a half years.<\/p>\n
BOK Senior Deputy Governor Kwon Min-soo said South Korea\u2019s economic\ngrowth was improving more strongly than expected. At the same time,\ninflation was above target and financial stability risks remained a\nconcern.<\/p>\n
These conditions kept the possibility of tight monetary policy alive\nahead of the next BOK meeting on 27 August 2026.<\/p>\n
The won also received support from coordination between South Korean\nand Japanese authorities. Officials from both countries met in Tokyo on\nFriday and committed to maintaining communication regarding foreign\nexchange market developments.<\/p>\n
The meeting took place several weeks after the two countries took\njoint steps to support their respective currencies.<\/p>\n
Below the won, the Thai baht strengthened 1.30% during the week to\nTHB32.67\/US$. The Malaysian ringgit followed with a gain of 1.20%,\nfollowed by the Singapore dollar which appreciated 0.75%.<\/p>\n
The Taiwan dollar also strengthened 0.57% to TWD 31.825\/US,\u2006f<\/em>o<\/em>l<\/em>l<\/em>o<\/em>w<\/em>e<\/em>d<\/em>b<\/em>y<\/em>t<\/em>h<\/em>e<\/em>C<\/em>h<\/em>i<\/em>n<\/em>e<\/em>s<\/em>e<\/em>y<\/em>u<\/em>a<\/em>n<\/em>w<\/em>h<\/em>i<\/em>c<\/em>h<\/em>r<\/em>o<\/em>s<\/em>e<\/em>0.30<\/span>.<\/p>\n Meanwhile, the Japanese yen strengthened 0.23% to JPY 158.93\/US$.<\/p>\n The Vietnamese dong recorded the most limited gain of 0.13% to\nVND26,114\/US$.<\/p>\n On the other hand, the Philippine peso was the only Asian currency to\nweaken. The peso corrected 0.33% during the week to PHP 61.650\/US$.<\/p>\n The strengthening of most Asian currencies took place as the US\ndollar index (DXY) weakened 0.87% during the week to 98.800.<\/p>\n Pressure on the dollar emerged amid rising concerns over US fiscal\nconditions after the government debt of Uncle Sam\u2019s country breached\nUS40t<\/em>r<\/em>i<\/em>l<\/em>l<\/em>i<\/em>o<\/em>n<\/em>f<\/em>o<\/em>r<\/em>t<\/em>h<\/em>e<\/em>f<\/em>i<\/em>r<\/em>s<\/em>t<\/em>t<\/em>i<\/em>m<\/em>e<\/em>.T<\/em>h<\/em>e<\/em>f<\/em>i<\/em>g<\/em>u<\/em>r<\/em>e<\/em>i<\/em>s<\/em>e<\/em>q<\/em>u<\/em>i<\/em>v<\/em>a<\/em>l<\/em>e<\/em>n<\/em>t<\/em>t<\/em>o<\/em>R<\/em>p<\/em>707,\u2006400t<\/em>r<\/em>i<\/em>l<\/em>l<\/em>i<\/em>o<\/em>n<\/em>(a<\/em>s<\/em>s<\/em>u<\/em>m<\/em>i<\/em>n<\/em>g<\/em>a<\/em>n<\/em>e<\/em>x<\/em>c<\/em>h<\/em>a<\/em>n<\/em>g<\/em>e<\/em>r<\/em>a<\/em>t<\/em>e<\/em>o<\/em>f<\/em>R<\/em>p<\/em>17,\u2006685\/U<\/em>S<\/em><\/span>).<\/p>\n The large budget deficit and the need for debt issuance triggered a\nsell-off in US government bonds. The yield on 30-year US Treasury notes\nbriefly surged to around 5.34%, the highest since 2007.<\/p>\n The US Treasury Department then increased its buyback programme for\nlong-term bonds to ease pressure in the bond market.<\/p>\n The purchase value of 10-30 year bonds was raised at least twofold,\nfrom US$2 billion to a minimum of US$4 billion in each operation.<\/p>\n The increase is scheduled to apply to operations from 9 September to\n4 November 2026.<\/p>\n The announcement briefly lowered long-term US bond yields. However,\nmarket participants also worried that efforts to contain rising yields\nwould instead shift pressure to the dollar.<\/p>\n \u201cBessent\u2019s efforts to push down US yields have not had much impact on\nyields, but instead weakened the dollar,\u201d said Bannockburn Global Forex\nChief Market Strategist Marc Chandler, as quoted from Reuters.<\/p>\n The dollar\u2019s weakening provided room for Asian currencies to\nstrengthen as pressure on emerging market assets eased.<\/p>\n Nevertheless, the market is still assessing the direction of Federal\nReserve policy. Market participants estimate the probability of a US\nrate hike in September at around 40%, while the likelihood of a hike by\nDecember reaches 72%.<\/p>\n Investor attention will next turn to the speech by Fed Chair Kevin\nWarsh at the Jackson Hole symposium next week for clues on the direction\nof US interest rates amid inflationary pressures and bond market\nturmoil.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/us-dollar-slumps-rupiah-and-most-asian-currencies-rally-1787388729",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}