Rupiah Could Reach Rp17,500/US$, Provided These 4 Conditions Are Met
Jakarta, CNBC Indonesia - Banking economists have indicated that the rupiah could strengthen to the psychological level of Rp17,500 per US dollar, though several conditions must first be met.
Bank Permata Chief Economist Josua Pardede said the rupiah’s move towards the psychological level of Rp17,500 in the near term is considered reasonable, given that the currency is currently positioned at the psychological level of Rp17,600.
“The rupiah reaching around Rp17,500 in the near term is, in my view, quite realistic. The distance from around Rp17,600 is relatively small and fundamentally there is still room for appreciation,” Josua told CNBC Indonesia, quoted on Monday (24/8/2026).
However, for the rupiah to reach that psychological level, several conditions must be met, such as continued inflows into government securities (SBN) and Bank Indonesia rupiah securities (SRBI), the US dollar not strengthening sharply again, oil prices tending to remain stable and not surging once more, and the market maintaining confidence that Bank Indonesia can preserve stability without additional interest rate hikes.
“We estimate that the Rp17,500-Rp17,550 level could be tested in the coming weeks, especially if foreign fund flows into SBN grow larger and are not solely reliant on SRBI,” Josua explained.
Even so, Josua stressed that the psychological level of Rp17,500 should not yet be regarded as a new equilibrium level. This is because global conditions remain uncertain, with oil prices yet to form a new equilibrium point and potentially surging again, which could cause the rupiah to deteriorate once more.
“If oil prices rise again or the market once more anticipates a more aggressive US interest rate hike, the rupiah could quickly return to Rp17,700-Rp17,900,” Josua explained.
“So appreciation towards Rp17,500 is quite possible, but the ability to hold below Rp17,500 requires stronger improvement in the current account and domestic foreign exchange supply,” he said.
Bank Central Asia (BCA) Chief Economist David E. Sumual said there is potential for the rupiah to return to the level of Rp16,000 per US dollar, particularly in the third quarter of 2026. This, he said, is because Indonesia’s current account still has the potential to be pressured by relatively high oil prices.
“Meanwhile, movements in financial assets also still tend to be dynamic,” he said.
By the end of 2026, the exchange rate is projected to be in the range of Rp17,800 - Rp18,100 per US dollar through to year-end. David’s projection is based on the assumption that the Federal Reserve still has the potential to raise its benchmark interest rate at least once due to inflation risks that continue to loom over the United States.