Rupiah Opens Weaker, US Dollar Rises to Rp17,725 This Morning
The rupiah exchange rate opened weaker against the US dollar in trading this morning, starting the week in negative territory.
According to Refinitiv data, at the opening of trading on Monday (31/8/2026), the rupiah depreciated 0.23% to Rp17,725 per US dollar.
The weakening reversed Friday’s gain (28/8/2026), when the rupiah closed 0.17% stronger at Rp17,685 per US dollar.
Meanwhile, the US dollar index (DXY), which measures the greenback against six major world currencies, was seen correcting 0.08% to 99.624 at 09.00 WIB.
This morning’s correction came after the DXY surged 0.55% at the close of trading last Friday.
Pressure on the rupiah was linked to the dollar’s surge in the previous session. The greenback strengthened sharply after Federal Reserve Chair Kevin Warsh opened the door to interest rate hikes if inflation does not move back towards the 2% target.
In his first speech at the Jackson Hole symposium on Friday (28/8/2026), Warsh said the Fed still had work to do if inflationary pressures did not ease. The statement was his strongest signal yet that rate hikes may be needed to control prices.
The probability of a Fed rate hike of at least 25 basis points at the September meeting jumped to 57.5%, from around 35% before Warsh’s speech, according to CME FedWatch.
Expectations of higher US interest rates increase the appeal of dollar-denominated assets. This can hold back capital flows to developing countries and add pressure on the rupiah.
The US dollar also strengthened nearly 0.9% over the past week, recording its largest weekly gain in 10 weeks. The DXY even touched 99.727, its highest level since 17 August 2026. The dollar’s persistent strength limits room for the rupiah to appreciate at the start of the week.
Domestically, the market is also awaiting the DPR plenary session on Tuesday (1/9/2026), which will discuss the appointment of Destry Damayanti as the candidate for Bank Indonesia Governor for the 2026-2031 period.
In addition to Destry, Aida S. Budiman will be appointed as the candidate for Senior Deputy Governor of BI, while Solikin M. Juhro will be the candidate for Deputy Governor of BI.
Certainty over the new BI leadership line-up is in focus because it relates to the continuity of monetary policy and the central bank’s commitment to maintaining rupiah stability.