Rupiah Closes Strong as US Dollar Drops Below Rp18,000
The Rupiah exchange rate successfully closed stronger against the US Dollar in the final trading session of July. The Indonesian currency moved back below the psychological level of Rp18,000/US$.
According to Refinitiv data, at the close of trading on Friday (31/07/2026), the Rupiah appreciated by 0.47% to a position of Rp17,990/US.Thisstrengtheningwasmoresignificantcomparedtothemorningopening, wheretheRupiahhadopened0.19.
Today’s Rupiah appreciation reversed the pressure from previous trading, when the currency closed 0.17% weaker at Rp18,075/US$.
Meanwhile, the US Dollar Index (DXY), which measures the strength of the greenback against six major world currencies, was observed to strengthen by 0.31% to 100.173 at 15:00 WIB. Although the DXY strengthened during today’s Asian trading, it had recently faced heavy pressure in previous sessions, plunging 1.01% to the level of 99.864.
The Rupiah remained able to strengthen despite the DXY rebounding today, supported by the sharp weakening of the US Dollar in previous sessions. The DXY had previously recorded one of its largest intraday declines against several major world currencies as markets responded to US June inflation data and US economic growth in the last quarter. These data points have influenced market expectations regarding the direction of US central bank, the Federal Reserve (The Fed), policy, following the decision to maintain interest rates within the 3.50%-3.75% range during this week’s meeting.
Domestically, the interim Governor of Bank Indonesia (BI), Destry Damayanti, emphasised that Rupiah stability and inflation remain the central bank’s primary focus. This focus arises amidst high global economic uncertainty caused by war and the risk of a ‘higher for longer’ interest rate era.
“The challenges in the short term that must truly be our concern are maintaining stability, both in relation to the Rupiah exchange rate and inflation,” said Destry during an online media briefing on Friday (31/07/2026).
According to Destry, these challenges were addressed through the decision of the Bank Indonesia Board of Governors meeting for the July period, which maintained the BI Rate at 5.75%. “Because we see external uncertainties affecting domestic stability, particularly regarding domestic asset pricing, such as SBN rates, yields, and other instruments like SRBI,” she added.
In addition to the exchange rate, BI is also monitoring food inflation pressures, which have risen above 5%. This position has exceeded the general inflation target of 2.5% plus/minus 1%.
“Looking ahead, there are inflation challenges, specifically food inflation. Core inflation remains relatively safe at 3.5% in the latest position, but food inflation exceeding 5% is a point of concern for us,” said Destry.