Rupiah Predicted to Breach Rp 18,000 Level Again This Weekend

The rupiah exchange rate against the US dollar has continued to weaken in recent days. By the end of this week, the Garuda currency is predicted to once again breach the level of Rp 18,000 per US dollar. Currency and commodity analyst Ibrahim Assuaibi stated on Friday (26/5/2026) that the rupiah had weakened sharply by 47 points, trading at Rp 17,990 per US dollar, and was likely to touch Rp 18,000 by the weekend. He explained that the correction was driven by both external and internal factors. Externally, US economic data supported a strengthening of the dollar index, which in turn pressured emerging market currencies like the rupiah. Data released overnight included a revision of the first-quarter US GDP to 2.1 per cent year-on-year, up from 1.6 per cent. Additionally, initial jobless claims fell by 12,000 to 215,000, significantly better than the 225,000 claims forecast by economists. The Core Personal Consumption Expenditures (PCE) price index for May also rose to 3.41 per cent year-on-year, up from 3.3 per cent the previous month. This data caused a gap up in the dollar index, which is currently observed in the range of 101.40 to 101.50 and is technically expected to strengthen towards 102. Speculation regarding the Federal Reserve’s monetary policy under the leadership of Kevin Warsh, which is perceived as more hawkish, is also a contributing factor. There are predictions that the US central bank will raise interest rates twice this year, possibly in July or September and again in December. This outlook is linked to rising US inflation, which climbed to 4.2 per cent year-on-year in May, far exceeding the Fed’s 2 per cent target, as well as increases in staple goods prices including gasoline. President Donald Trump has reportedly appointed an attorney general to investigate the price hikes, though he stated that prices would stabilise and inflation would approach the 2 per cent target after the conclusion of the conflict with Iran. Domestically, the market is also focusing on Indonesian economic data, including inflation and trade balance figures, which are adding to the pressure on the rupiah.