Rupiah Opens Flat, US Dollar Steady at Rp17,600

The rupiah opened flat against the United States dollar in Thursday’s trade (21 May 2026). According to Refinitiv data, the rupiah started the morning at Rp17,600 per US, unchangedfromthepreviousclose.OnWednesday(20May2026), therupiahclosedup0.54, after Bank Indonesia (BI) raised its policy rate by 50 basis points to 5.25%. Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major currencies, was seen edging lower. As at 09:00 WIB, DXY fell 0.01% to 99.082, after a 0.24% decline in the previous session. Rupiah movements today were expected to continue to be influenced by domestic and external sentiment. Domestically, BI’s decision to raise the policy rate remains one of the factors underpinning rupiah gains. BI decided to raise the BI Rate by 50 basis points to 5.25%. Accordingly, the Deposit Facility rate is set at 4.25%, while the Lending Facility is at 6.25%. “This policy is a further step to strengthen rupiah stability against the impact of Middle East turbulence,” said BI Governor Perry Warjiyo in the presentation of the Board of Governors’ Meeting (RDG), Wednesday (20 May 2026). The rate hike is the first in eight months. According to Perry, the decision was discussed and weighed carefully and prudently, while continuing to consider external stability and economic growth. “In assessing how much to raise the BI Rate, we consider growth. The assessment balances inflation and the impact, which certainly does not disproportionately affect growth, which we take into account in the Phillips inflation-growth curve,” he said. Perry also said the 50 basis point increase was aimed at curbing inflation while maintaining economic growth within target. Externally, the dollar’s weakness in global markets also provided a positive sentiment for the rupiah. The dollar moved below its six-week high, after weakening as hopes grew that Washington was nearing a joint agreement with Tehran to end the conflict in the Middle East. US President Donald Trump said talks had entered the final stage. However, Trump warned of possible further attacks if Iran did not approve the agreement. The dollar’s weakness and rising expectations of easing geopolitical tensions renewed investors’ appetite for risk assets. This could provide room for strengthening emerging-market assets, including Indonesia, which in turn supports the rupiah’s movements.