Rupiah Opens Slightly Stronger as US Dollar Drops to Rp17,850
The rupiah exchange rate opened stronger against the US dollar at the start of the first trading session of June on Tuesday (2/6/2026), following the long weekend. According to Refinitiv data, the Indonesian currency began trading in the green with a 0.08% appreciation to the level of Rp17,850/US.ThisstrengtheningfollowstheprevioustradingsessiononFriday(29/5/202<0xA0>6), wheretherupiahhadcorrectedsharplyby0.51.
Meanwhile, the US Dollar Index (DXY), which measures the strength of the greenback against six major world currencies, remained stable. As of 09:00 WIB, the DXY stood at 99.201, after closing up 0.30% on Monday. The rupiah’s movement today continues to be influenced by both domestic and international sentiments.
Domestically, Bank Indonesia (BI) continues to calibrate policy instruments in the foreign exchange market to maintain the stability of the rupiah exchange rate. Through Regulation of the Member of the Board of Governors Number 7 of 2026, BI officially reduced the limit for US dollar purchase transactions without underlying documents from US$100,000 to US$50,000 per April 2026. This limit has been further tightened to US$25,000 per participant per month, effective from early June 2026. This tightening of transaction recording in the spot market is accompanied by an expansion of relaxation in the derivative market. For instruments such as forward sells and swaps, the transaction limit without underlying documentation has been increased to US$10 million per transaction. Additionally, market participants are being encouraged to utilise Local Currency Transaction (LCT) schemes in bilateral trade; as of April 202<0xC2>6, LCT transaction volume reached US$22.61 billion.
Externally, the movement of the US dollar requires close monitoring. The US dollar strengthened in last night’s trading after recording a slight weekly decline the previous week. This occurred as markets closely watched the latest developments in Middle East peace negotiations. Previously, the US dollar index had weakened due to expectations that a deal between the US and Iran to reopen the Strait of Hormuz was approaching. The closure of this major oil route had driven oil prices up and worsened inflation prospects, leading to expectations that the US Federal Reserve might raise interest rates this year. However, the US dollar rebounded following reports that Iranian negotiation teams had halted message exchanges with the US via mediators due to attacks in Lebanon. Subsequently, US President Donald Trump stated he had spoken with Hezbollah, the Lebanese militia affiliated with Iran, through intermediaries and received a commitment that the group would not attack Israel, which subsequently trimmed some of the dollar’s gains. The strengthening of the US dollar in global markets may ultimately limit the appreciation potential of other currencies, including the rupiah.