Rupiah Expected to Remain Above 18,000 per US Dollar Amid BI Leadership Transition

The rupiah is projected to remain in the range of Rp 18,000 to Rp 18,300 per US dollar in the near term following the resignation of Bank Indonesia (BI) Governor Perry Warjiyo. Syafruddin Karimi, an economist from Andalas University, stated that the currency’s breach of the psychological level reflects market demand for a higher risk premium due to institutional uncertainty.

Based on available data, the USD/IDR exchange rate moved from around Rp 17,935 to Rp 18,080. The one-month Non-Deliverable Forward (NDF) rose from Rp 17,956 to Rp 18,132, while implied volatility for the same tenor increased from 5.40 percent to approximately 5.98 percent. The Jakarta Composite Index (IHSG) also fell by 0.63 percent, indicating that the pressure is no longer confined to the foreign exchange market.

Syafruddin noted that BI maintained its benchmark interest rate at 5.75 percent on 22 July 2026 and expanded policies to attract foreign portfolio flows and maintain rupiah stability. He suggested the rupiah could strengthen back below Rp 18,000 if a highly credible candidate is selected as the new governor, stability-oriented policies are preserved, and the risk premium begins to decline.

Currently, Senior Deputy Governor Destry Damayanti serves as acting governor. Syafruddin believes an ideal transition period of one to two months is needed to calm the markets. He added that while the IHSG is expected to remain volatile, major banking stocks may hold up, whereas infrastructure, property, and firms with significant foreign currency debt are more vulnerable to higher interest rates and rupiah depreciation.