Analyst Predicts Rupiah to Hit 18,000 per US Dollar Next Week

Financial analyst Ibrahim Assuaibi predicts the rupiah could reach Rp18,000 per US dollar next week. As of today (29 May) at 11:13 AM, the rupiah weakened by 39 points to Rp17,885 per US dollar.

He explained that the main cause of the rupiah’s weakness is not a technical error by Bank Indonesia, the monetary authority, but structural issues. Firstly, he stated, the current account deficit is structural rather than temporary, making it difficult for foreign investors to enter Indonesia’s stock and bond markets.

‘The current account deficit has widened, from Rp150 million in Q1 2025 to Rp4.01 billion in Q1 2026,’ he said.

The widening deficit coincided with a shrinking trade surplus. Indonesia’s trade surplus fell from US$13.07 billion in Q1 2025 to US$7.98 billion in Q1 2026, partly due to escalating geopolitical tensions in the Middle East, particularly after Iran blocked the Strait of Hormuz.

‘The blockade of the Strait of Hormuz has disrupted 20% of global oil and gas transportation, driving up prices for both Brent and WTI crude oil,’ he said.

He noted Indonesia is one of Asia’s largest oil importers, consuming 1.5 million barrels per day, 85% of which is subsidised for public use.

‘Thus, the government requires substantial dollars to offset the deficit,’ he said.

Secondly, companies on the stock exchange must pay dividends in dollars. Thirdly, maturing debt interest alone amounts to nearly Rp600 trillion, requiring the government to issue new debt.

‘New foreign debt issuance has been lacklustre, so the government has turned to the Chinese market with Panda Bonds at 2.3% to 2.5% interest rates. However, investor interest in China has also waned, contributing to the rupiah’s continued depreciation,’ he added.

Finally, he cited Indonesian households’ FOMO (fear of missing out) driving funds from gold and conventional savings into foreign currency. ‘In April, 24% of household savings shifted to forex, as people anticipated the rupiah would hit Rp22,000. They expect short-term gains,’ he said.