Rupiah Predicted to Strengthen to 17,500 per US Dollar
The rupiah exchange rate is predicted to strengthen to the 17,500 level against the US dollar next week. Trimegah Sekuritas Indonesia Chief Economist Fakhrul Fulvian estimates the rupiah’s appreciation will continue, influenced by Bank Indonesia’s benchmark interest rate hike and the increase in the price of non-subsidised Pertamax fuel.
On Monday morning, 15 June 2026, the rupiah moved stronger by 82 points, or 0.46 percent, to Rp 17,778 per US dollar compared to the previous close of Rp 17,860 per US dollar. By 11.00 WIB, the rupiah had reached the level of 17,685 per US dollar.
According to Fakhrul, after experiencing considerable pressure in recent months, the market is beginning to see a clearer and more consistent shift in policy direction. For next week, he forecasts the rupiah will move in the range of 17,450 to 17,650 per US dollar with a tendency to strengthen.
“The rupiah still has the potential to strengthen towards the range of Rp 17,500 per US dollar next week. The market is beginning to see that Indonesia’s economic authorities are willing to take the necessary steps to maintain macroeconomic stability and restore investor confidence,” Fakhrul said in a written statement on Monday.
He argued there are three important steps currently forming the foundation for the rupiah’s strengthening. First, Bank Indonesia has demonstrated a strong commitment to exchange rate stability through a cumulative interest rate hike of 75 basis points. This move provides a clear signal to the market that rupiah stability is a top priority and helps increase the attractiveness of Indonesian financial assets.
Second, the adjustment of fuel prices, particularly Pertamax, is beginning to improve market perception of Indonesia’s fiscal condition. “Although it is an unpopular policy, this step demonstrates the government’s courage to make necessary adjustments to maintain the sustainability of the state budget (APBN),” he said.
Third, efficiency measures and budget adjustments in a number of government programmes, including the Free Nutritious Meals (MBG) and the Red and White Village Cooperatives (KDMP), are beginning to be read by the market as a signal that fiscal discipline is once again a priority.
According to Fakhrul, the market’s response to these policy changes is becoming quite evident. Last week, the rupiah was recorded as one of the best-performing currencies in Asia after the South Korean won. “If the fiscal normalisation process continues and policy consistency is maintained, I see the opportunity for the rupiah to become one of the currencies with the best strengthening in the region this week as quite open,” he said.
Beyond domestic factors, Fakhrul assesses that global geopolitical developments also have the potential to provide additional positive momentum for the rupiah. The improving relationship between the United States and Iran, along with the increasing likelihood of a more permanent agreement, will help lower global risk premiums, improve sentiment in emerging markets, and reduce pressure on world energy prices.
If the peace process between the United States and Iran continues to move in a positive direction, the momentum for rupiah strengthening could become even stronger. Declining geopolitical risk typically encourages investors to return to emerging market assets, including Indonesia.