Reasons Behind the US Dollar Breaking Through Rp17,000
The rupiah faced pressure today against the US dollar. The Garuda currency has even been cornered to exceed the Rp17,000 per US dollar level as of 09:31 WIB, based on Refinitiv data.
The rupiah exchange rate has consistently faced heavy pressure since 26 March 2026. At that time, the rupiah against the US dollar was actually able to strengthen to Rp16,895 from the previous Rp16,975 per US dollar on 17 March 2026.
On 27 March 2026, the rupiah moved to Rp16,960 per US dollar, and climbed to Rp16,990 per US dollar on 31 March 2026, before finally settling at Rp17,000 per US dollar today.
Head of Economics at Davidi Sumual said the pressure on the rupiah today is more caused by external factors, namely the continued rise in world crude oil prices due to the war in the Middle East, which is causing concerns among financial market players.
However, he acknowledged that internal problems also cannot be ignored as factors adding to the pressure on market players’ sentiment, especially regarding the spillover effects from the rise in oil prices to the state budget. As a result, selling pressure is evident in the government bond market.
“So it’s still about negative external sentiment such as rising oil prices and concerns about its impact on the state budget. There is quite strong selling pressure from foreigners in the SUN market,” Sumual told CNBC Indonesia on Wednesday (1/4/2026).
Head of Macro Economic and Market Research at Permata Bank, Faisal Rachman, added that besides the ongoing Middle East war sentiment—although it started to ease last night, leading to a risk-on sentiment—the rupiah is still burdened by negative domestic sentiment.
He explained that among them is the government’s decision not to raise unsubsidised petrol prices, which creates uncertainty and concerns about Indonesia’s fiscal condition going forward, thus leading to risk-off from that side.
The second factor is that improving global sentiment makes Bank Indonesia likely not to rush into interventions in the FX market as in previous days. Third, this has entered the second quarter where payments of returns on Indonesian financial assets to non-residents tend to increase seasonally.
“And fourth, there is also anticipation of the release of Indonesia’s inflation data and trade balance today,” he emphasised.