Rupiah Corrects This Morning, US Dollar Returns to Rp17,950

The rupiah exchange rate began the final trading day of the week, Friday (26/6/2026), in negative territory against the United States (US) dollar. Referring to Refinitiv data, the Garuda currency opened weaker at Rp17,950 per US dollar, depreciating by 0.20%. This decline occurred after the rupiah managed to close slightly stronger by 0.06% at Rp17,915 per US dollar in the previous session on Thursday (25/6/2026). Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed strengthening 0.10% to 101.533 as of 09:00 WIB. The rupiah’s movement today is still expected to remain positive amid relatively stable US dollar dynamics in the global market. The US dollar index had halted a three-day rally on Thursday’s trading. The DXY moved down from its strongest level since May 2025, although it remains on track for a second consecutive weekly gain since the Middle East conflict reignited in late February. Market participants are also still scrutinising US inflation data. The Personal Consumption Expenditures (PCE) Price Index, the central bank’s preferred inflation gauge, rose 4.1% year-on-year in May 2026. This increase was in line with economists’ expectations and indicates that cost-of-living pressures in the US remain high, particularly after the Middle East conflict contributed to rising energy prices. Domestically, the government is seeking to reduce dependence on the US dollar. One such effort involves a plan to issue Chinese yuan-denominated bonds, known as Panda Bonds. Herman Saheruddin, Acting Director General of Financial Sector Stability and Development at the Ministry of Finance, stated that the Panda Bond issuance is part of diversifying the government’s financing sources. ‘The reason for issuing Panda Bonds is to seek alternative financing sources, or it can be said as diversification. With this diversification, the hope is that the risk to our state budget burden from debt financing originating from exchange rate risk can be diversified, and we can reduce the impact of US dollar dependence,’ Herman said when met by reporters at his office on Thursday (26/6/2026). With more diverse financing sources, pressure from US dollar fluctuations on the state budget is expected to be more limited. Herman assessed that China is an attractive partner because it has demand for Indonesian bonds at prices still aligned with the country’s economic fundamentals. Previously, Finance Minister Purbaya Yudhi Sadewa also emphasised that Panda Bonds are strategic as part of efforts to diversify government securities. This scheme can also utilise Local Currency Transactions (LCT), thereby eliminating the need to rely on conversion to US dollars.