Rupiah Potential to Hit Rp18,300 per US Dollar Next Week, Observers Reveal Causes

The Rupiah exchange rate is expected to remain under pressure in next week’s trading, driven by rising global geopolitical tensions and potential shifts in the United States Federal Reserve’s interest rate policy.

Currency and commodity observer Ibrahim Assuaibi notes that market participants will closely monitor several Indonesian economic indicators, including the trade balance, inflation, manufacturing PMI, foreign exchange reserves, and the Consumer Confidence Index (IKK), all of which could exert additional pressure on the Rupiah.

“Regarding the Rupiah itself, we see that next week the market will be looking at the volume of data to be released in the US. In Indonesia, specifically, it is the trade balance, where there is a high possibility of a deficit for June. This will also impact the Rupiah next week,” said Ibrahim Assuaibi when contacted on Sunday, 2 August 2026.

In addition to the trade balance, Ibrahim predicts that domestic inflation will ease due to market interventions affecting food prices. “Secondly, regarding inflation, it is also likely to moderate, as prices are relatively lower due to market intervention, potentially falling below 3.34 per cent,” he stated.

In the industrial sector, Ibrahim anticipates that Indonesia’s manufacturing activity will remain unable to exit the contraction zone. “We are also looking at the Manufacturing PMI data for Indonesia, which is likely to remain in contraction below 50. Although it might be above 46.9 in July, it remains contracting. This indicates that the workforce is declining drastically, with layoffs occurring everywhere,” he said.

He also projected that Indonesia’s foreign exchange reserves would experience a decline compared to the previous month. “Furthermore, foreign exchange reserves are also likely to decrease compared to June. In June, we saw US$145.6 billion. It is likely to decline, and these reserves can only cover 4.9 months of imports,” added Ibrahim. He noted that such a level of foreign exchange reserves does not yet meet the standard typically used as a benchmark for countries with investment-grade debt ratings.