Rupiah Opens Weaker as US Dollar Climbs to Rp17,960

The rupiah opened weaker at the start of the week, falling 0.42% to Rp17,960 against the US dollar. The dollar index (DXY) against six major world currencies was stable at 100.765 after strengthening 0.28% at the close of trading last Friday. The US dollar edged higher against most major currencies in early Asian trading today. Escalating conflict in the Middle East has increased investor caution, driving up oil prices and boosting demand for the safe-haven dollar. This has limited the room for appreciation of emerging market currencies, including the rupiah. From a monetary policy perspective, the market is still anticipating that the US Federal Reserve will hold interest rates at its upcoming meeting on 29 July. However, Cleveland Fed President Beth Hammack stated last Friday that she joined a number of other officials in believing that rates may need to be raised to curb persistently high inflation. This opens the possibility of a heated debate at the next Fed meeting. Domestically, the market is also awaiting the results of the Bank Indonesia (BI) Board of Governors Meeting, which will announce its benchmark interest rate decision on Wednesday (22/7/2026). BI has raised interest rates by a total of 100 basis points since May 2026, with the last 25 basis point increase on 18 June 2026, following an out-of-schedule meeting on 9 June to respond to pressure on the rupiah.