Fed Holds Interest Rates, Rupiah Strengthens

JAKARTA — Permata Bank Chief Economist Josua Pardede said the rupiah’s exchange rate against the US dollar on Thursday (29 October 2026) was influenced by the US Federal Reserve’s decision to hold interest rates. The rupiah opened 43 points, or 0.24 per cent, stronger at Rp18,141 per US dollar, compared with the previous close of Rp18,184.

“At the October 2026 Federal Open Market Committee (FOMC) meeting, the Fed kept its policy rate at 3.75–4.00 per cent, in line with consensus expectations,” Josua said in Jakarta on Thursday (29 October 2026).

The Fed was reported to have reiterated its commitment to maintaining price stability. Two FOMC members — Governor Lisa Cook and Cleveland Fed President Beth Hammack — dissented, voting for a 25-basis-point rate increase.

The US central bank also announced a reduction in the number of policy meetings next year at which members will vote on the policy interest rate.

“The Fed gave no clear indication of the possibility of raising the policy rate again in December 2026, emphasising that future policy decisions would depend on incoming data and be aimed at bringing inflation back to the 2 per cent target,” Josua said.

Given these factors, the rupiah is forecast to trade in a range of Rp18,100–Rp18,225 per US dollar.