Rupiah Closes Weaker at Rp 17,753 Following Fed Interest Rate Hike

The Rupiah exchange rate against the US Dollar experienced a decline, impacted by the US Federal Reserve’s decision to raise the benchmark interest rate by 25 basis points during the Federal Open Market Committee (FOMC) meeting on Wednesday (16/09/2026). The Garuda currency was recorded at the level of Rp 17,753 per US Dollar.

Quoting Bloomberg, the Rupiah corrected by 57 points or 0.32 per cent to the level of Rp 17,753 per US Dollar at the close of trading on Thursday (17/09/2026). In the previous trading session, the Rupiah also tended to be under pressure, positioned at Rp 17,696 per US Dollar.

“Regarding external sentiment, the FOMC decided unanimously to raise the federal funds rate to a range of 3.75-4 per cent on Wednesday. This marks the first interest rate hike by the US Central Bank since July 2023,” said Currency and Commodity Observer Ibrahim Assuaibi in his statement on Thursday (17/09/2026).

During the FOMC press conference, Fed Chair Kevin Warsh reaffirmed his concerns regarding inflation, stating that too many categories of products and services are showing annual price increases above 3 per cent over 6 and 12-month periods. Warsh hinted at further interest rate hikes in the coming months.

“However, US President Donald Trump on Wednesday demanded that the US central bank cut interest rates to 1 per cent or lower, just hours after the Fed announced the rate hike. This represents ongoing friction between the White House and the independent Fed,” he explained.

Another external sentiment affecting the Rupiah is the dynamics of geopolitical conflict in the Middle East. Ibrahim noted that the market responded positively to talks between the US and the Houthi group, which helped alleviate concerns regarding supply disruptions in the Middle East. Reuters reported that the US and the Iran-backed Houthi group in Yemen held dialogues over the weekend, during which the Houthis reaffirmed their commitment to a 2025 ceasefire and stated they would not attack US or Israeli ships.

“US President Donald Trump on Wednesday night repeated his claim that Iran is seeking a peace deal and that the US is expected to be nearing the end of their war. However, Washington and Tehran still disagree regarding the Strait of Hormuz, where shipping activity through this vital waterway remains far below pre-war levels,” he continued.