Destry Sah Becomes BI Governor, Rupiah Holds Steady at Rp17,710/US$

The Rupiah exchange rate ended today’s trading session stagnant against the US Dollar. The ‘Garuda’ currency managed to hold its position despite the US Dollar Index strengthening throughout Asian trading hours.

According to Refinitiv data, at the close of trading on Tuesday (1/9/2026), the Rupiah remained stagnant at Rp17,710/US$, unchanged from Monday’s (31/8/2026) close. Throughout the trading session, the Rupiah moved steadily within the range of Rp17,699 to Rp17,730 per US Dollar.

Meanwhile, the US Dollar Index (DXY), which measures the strength of the greenback against six major world currencies, was observed to have strengthened by 0.16% to the level of 99.594 as of 15:00 WIB. This strengthening of the DXY was more significant compared to the 0.04% increase recorded at 09:00 WIB.

The Rupiah’s movement today coincided with the 4th Plenary Session of the DPR for the first session period of the 2026-2027 term, which ratified Destry Damayanti as the Governor of Bank Indonesia (BI) for the 2026-2031 period. “Is the report of the results of the fit and proper test from Commission XI approved?” asked the Speaker of the DPR, Puan Maharani, during the plenary session on Tuesday (1/9/2026). The question was met with approval from the members of the DPR.

In addition to Destry, the DPR also ratified Aida S. Budiman as the Senior Deputy Governor of BI and Solikin M. Juhro as the Deputy Governor of BI for the 2026-2031 period. Destry is scheduled to take her oath of office before the Supreme Court on Wednesday (2/9/2026).

Following her ratification by the DPR, Destry reaffirmed her commitment to maintaining the independence of BI while strengthening coordination with the government. “We will indeed optimise the synergy that can be achieved, but certainly without neglecting the mandates and authorities of each institution involved in that synergy,” said Destry.

According to Destry, coordination is necessary so that fiscal and monetary policies can move in unison to maintain liquidity, inflation, exchange rate stability, and economic growth. Synergy will also be pursued through inflation control alongside central and regional governments, as well as the expansion of Local Currency Transactions (LCT) to reduce dependence on the US Dollar.

Certainty regarding the new leadership structure and the commitment to maintaining BI’s independence has helped provide clarity regarding the continuity of monetary policy. This sentiment helped mitigate pressure on the Rupiah even as the DXY moved higher.

Externally, the market continues to monitor the increasing likelihood of a Federal Reserve interest rate hike in September following hawkish statements from Fed Chair Kevin Warsh. Market participants now estimate the probability of a Fed rate hike at 6lar 65%, up from 41% the previous week, according to the CME FedWatch tool. Higher US interest rate expectations can increase the attractiveness of dollar-denominated assets and limit capital flows to emerging markets, including Indonesia.

Global pressure has also intensified following renewed attacks in the Gulf region. US President Donald Trump has threatened further attacks against Iran after both nations engaged in direct strikes. These tensions pushed Brent crude oil prices above US$91 per barrel and triggered selling in the bond market. The 10-year US Treasury yield rose to its highest level since January 2025.

Rising US bond yields increase the attractiveness of dollar assets, while the surge in oil prices could increase the demand for foreign exchange for energy imports. Both factors have the potential to pressure the Rupiah. However, domestic sentiment from the ratification of the new BI leadership was able to offset external pressures, allowing the Rupiah to remain stagnant until the close of trading.