Rupiah Breaches Rp 17,704 per US dollar as BI Expected to Raise Interest Rates?

JAKARTA – The rupiah’s value in the spot market came under renewed pressure on Tuesday, 19 May 2026. The Garuda currency slumped 30 points or 0.20 percent to Rp 17,704 per US dollar. Earlier, the rupiah closed at Rp 17,668 per US dollar, down 71 points or 0.40 percent on Monday. The weakness breaching the Rp 17,668 per dollar level has triggered fresh concerns in the domestic financial market. Senior Market Analyst Nafan Aji Gusta of Mirae Asset Sekuritas said the depreciation of the rupiah currently is one of the signals of rising risk perceptions among investors in Indonesian assets. He noted that the rupiah’s weakness also pressures the Jakarta Composite Index (IHSG), which remains in a volatile trend. “Market tends to respond to rupiah movements that are depreciating sharply to around Rp17,668–Rp17,681 per dollar. This is one of the record lows that trigger concerns about rising risk perceptions in Indonesian asset markets,” Nafan told Kompas.com on Tuesday, 19 May 2026. “The rupiah’s softness has triggered strong speculation in the market that BI is highly likely to raise the policy rate (BI Rate) by 25 bps to 5 percent in the BI Board of Governors meeting scheduled for 19–20 May 2026,” he added. The policy is viewed as an intervention to safeguard rupiah stability in the face of growing global pressures. Nafan noted that if the rate hike is met with a positive market response, the strategy could constrain a further downfall in the IHSG.