Rupiah Rebounds as US Dollar Dips Slightly to Rp17,675
The rupiah exchange rate successfully reversed its recent trend, closing stronger against the US dollar in today’s trading.
According to Refinitiv data, the rupiah ended trading on Wednesday (16/09/2026) at Rp17,675/US$, representing a slight appreciation of 0.03%. This strengthening ended a period of depreciation that had lasted for four consecutive trading days.
Throughout today’s session, the ‘Garuda’ currency initially weakened to Rp17,700/US$ at the market opening and touched a daily low of Rp17,740/US$. However, pressure began to subside towards the end of the session, with the rupiah rebounding to close 65 points higher from its intraday low.
Meanwhile, the US Dollar Index (DXY), which measures the strength of the greenback against six major world currencies, was observed to have weakened by 0.05% to 99.564 by 15:00 WIB. The DXY reversed its earlier gains after being up 0.12% at 09:00 WIB at the 99.730 level.
The rupiah gained some room to strengthen following the correction in the US dollar index. Nevertheless, the appreciation of the Indonesian currency remains limited as markets remain cautious ahead of the US central bank’s (The Federal Reserve/The Fed) interest rate decision.
The Fed is currently conducting its FOMC meeting on 15-16 September 2026, with the interest rate decision scheduled to be announced in the early hours of Thursday, Indonesian time. Market participants anticipate that the Fed will raise interest rates by 25 basis points, with the probability of such an increase reaching approximately 90%.
“A 25 basis point hike has been priced in at around 90%, so the dollar will only receive a moderate boost if the Fed raises rates,” said Carol Kong, Currency Strategist at Commonwealth Bank of Australia, as quoted by Reuters.
If realised, this decision would mark the Fed’s first interest rate hike in over two years, or since 2023. However, market attention is focused not only on the magnitude of the hike but also on statements from Fed Chair Kevin Warsh regarding the future direction of interest rates.
If the Fed raises rates but Warsh dampens the possibility of further hikes, the dollar could potentially weaken again, which might create more room for the rupiah to strengthen. Conversely, a rate hike accompanied by signals of further tightening could bolster the dollar and exert pressure on emerging market currencies, including the rupiah.
Markets are also facing a small possibility that the Fed may maintain interest rates. Such a decision could trigger a sharp correction in the dollar, as it would run contrary to the expectations of the majority of market participants.