Rupiah Continues to Weaken, Reaching 17,667 per US Dollar
The rupiah exchange rate hit a record low, closing at Rp 17,667 per US dollar during trading on Monday, 18 May 2026. Ibrahim Assuaibi, Director of PT Traze Andalan Futures, predicts that the rupiah will continue to weaken, potentially ranging between Rp 17,660 and Rp 17,720 per US dollar tomorrow.
Regarding external factors, Ibrahim stated that exchange rate developments are being influenced by rising inflation risks driven by high oil prices. “The prospect of tight monetary policy from the Fed is strengthening because higher energy prices have clearly slowed disinflation progress, pushing inflation further from the Fed’s 2 percent target,” Ibrahim said in a written statement on Monday.
Another factor is the stalling of efforts to end the war in the Middle East following an attack on a nuclear power plant in the United Arab Emirates (UAE). According to Ibrahim, drone attacks in the UAE and Saudi Arabia, alongside rhetoric from the US and Iran, have raised concerns regarding conflict escalation.
Domestically, Ibrahim highlighted statements made by President Prabowo Subianto, who suggested that villagers do not use US dollars in their daily activities. Ibrahim assessed the President’s statement as incorrect, noting that rural communities are currently more tech-savvy than urban populations due to widespread technological access. He also expressed regret over the failure of those around the President, particularly the Cabinet Secretary, to guide the President’s speech in accordance with established protocols.
Meanwhile, Bank Indonesia Governor Perry Warjiyo believes the rupiah will reverse course and strengthen in July or August 2026 after hitting the 17,600 level per US dollar. He explained that this movement follows a historical pattern observed whenever the rupiah faces pressure.
“From our experience—and I do not wish to be arrogant, as I have lived through crisis after crisis, including 1997-1998, the 2008 global conditions, the taper tantrum, and Covid—exchange rate pressures generally ease and strengthen around July-August,” Warjiyo stated during a meeting with Commission XI of the House of Representatives in Senayan on Monday, 18 May 2026.