BI Rate Hike! Rupiah Closes Stronger, US Dollar Falls to Rp17,700
Jakarta, CNBC Indonesia — The Garuda currency managed to turn the tide and closed stronger against the United States (US) dollar in trading on Thursday (18/6/2026). This strengthening occurred after Bank Indonesia (BI) again raised its benchmark interest rate.
Referring to Refinitiv data, the rupiah closed up 0.17% or appreciated to the level of Rp17,700/US.Thisstrengtheningsimultaneouslyreversedtherupiah′spositioncomparedtotheprevioustradingclose.OnWednesday(17/6/2026), therupiahhadcloseddown0.23.
Throughout today’s trading, the rupiah actually started the day in the red zone. The Garuda currency opened sharply lower, down 0.62% to the level of Rp17,840/US$.
However, pressure on the rupiah slowly narrowed ahead of the announcement of the results of the BI Board of Governors Meeting (RDG). After BI’s decision was announced, the rupiah was able to reverse the situation and ended stronger at the close of trading.
Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed as of 15.00 WIB to have strengthened 0.19% to the level of 100.281.
The rupiah’s strengthening today occurred after the Bank Indonesia RDG on 17-18 June 2026 decided to raise the BI Rate by 25 basis points to 5.75%.
In line with this decision, the Deposit Facility rate also rose 25 basis points to 4.75%, while the Lending Facility rate rose 25 basis points to 6.50%.
"The BI RDG on 17-18 June 2026 decided to raise the BI Rate by 25 bps to 5.75%," said BI Governor Perry Warjiyo at a press conference on Thursday (18/6/2026).
This increase is a further step by BI to strengthen the stabilisation of the rupiah exchange rate. In addition, the policy is also a pre-emptive measure to keep inflation in 2026 and 2027 within the government’s target range of 2.5±1%.
At the May 2026 Monthly RDG, BI had first raised the BI Rate by 50 basis points. Then at the Weekly RDG last week, BI again raised the BI Rate by 25 basis points to 5.50%. Now, BI has again raised the interest rate by 25 basis points to 5.75%. In total, BI has raised the BI Rate by 100 bps in the last month.
BI’s decision this time is in line with a CNBC Indonesia poll. Of 14 institutions contacted, eight predicted the BI Rate would rise by 25 basis points to 5.75%.
From the external side, the rupiah is actually still facing headwinds from the strengthening US dollar in global markets.
The US dollar strengthened after the US central bank, the Federal Reserve (The Fed), maintained its benchmark interest rate, but the central bank’s statement indicated policymakers still see the possibility of a rate hike this year amid growing concerns over inflation.
The Fed maintained its benchmark interest rate in the range of 3.50%-3.75%. However, the latest quarterly projections showed nine Fed officials now anticipate a rate hike before the end of 2026.
This condition made the US dollar again attractive to market participants. Nevertheless, the BI Rate hike was able to provide positive sentiment for the rupiah, allowing the Garuda currency to successfully reverse course and strengthen at the end of today’s trading.