Rupiah Opens Higher, US Dollar Falls to Rp17,720 This Morning
The rupiah exchange rate strengthened again against the US dollar at the opening of trading this morning. The Garuda currency has the opportunity to extend its positive trend ahead of the end of this week’s trading.
Based on Refinitiv data, the rupiah began trading on Friday (21/8/2026) with a gain of 0.11% to Rp17,720/US$.
This strengthening continued the positive performance of the previous two trading sessions. On Thursday (20/8/2026), the rupiah closed up 0.48% at Rp17,740/US$, after strengthening 0.14% a day earlier.
Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed at 09.00 WIB weakening 0.10% to 98.799.
The DXY came under pressure again after closing slightly higher by 0.06% in the previous session.
The rupiah’s movement today is expected to remain influenced by dynamics in the US bond market and anticipation of the release of Indonesia’s Balance of Payments (BOP) for the second quarter of 2026.
The US dollar continues to face pressure after the US Treasury Department announced plans to double buybacks of 10-30 year government bonds to at least US$4 billion in each operation.
The move aims to calm the bond market, which has been shaken by concerns over the widening US fiscal deficit. However, the policy initially triggered dollar selling because the market assessed that pressure from the large deficit could shift from rising bond yields to currency weakness.
The dollar briefly recovered on Thursday after bond yields rose again. Market participants still doubt the ability of the buyback policy to sustainably ease pressure in the debt market.
Investors’ next focus is on the speech by the head of the US central bank, the Federal Reserve, Kevin Warsh, at the Jackson Hole symposium for clues on the direction of interest rates.
The minutes of the Fed’s July meeting showed that concerns about inflation remain strong. A number of officials are prepared to raise interest rates if inflation does not move towards the 2% target.
The market now prices in a 35% chance of a rate hike in September. The probability rises to 67% for the December meeting, potentially limiting further dollar weakness.
Domestically, Bank Indonesia is scheduled to announce the BOP and current account for the second quarter of 2026 on Friday. The data will serve as one measure of Indonesia’s external sector resilience amid global uncertainty and changes in international capital flows.
The market will watch whether the BOP can improve after recording a deficit of US$9.1 billion in the first quarter of 2026. That position reversed from a surplus of US$6.1 billion in the fourth quarter of 2025 due to a widening current account deficit and a reversal of the capital and financial account into deficit territory.
An improvement in the BOP could increase confidence in Indonesia’s external resilience and provide additional support for the rupiah. Conversely, a still-wide deficit could limit the Garuda currency’s strengthening.