Rupiah Strengthens Again, US Dollar Closes Lower at Rp17,460

The rupiah exchange rate successfully returned to strengthening territory against the US dollar at the close of trading on Wednesday (13/5/2026). According to Refinitiv data, the Garuda currency ended trading at Rp17,460/US, strengtheningby0.17 at the morning opening. Thus, the rupiah appears to be starting to move away from the psychological level of Rp17,500/US$. Today’s strengthening also broke the rupiah’s weakening trend over three consecutive trading days. Meanwhile, the US dollar index or DXY, as of 3:00 PM WIB, was observed strengthening by 0.12% to 98.419. Today’s rupiah strengthening is quite interesting as it occurs amid a still-strong US dollar in the global market. The US dollar held near its one-week high following renewed heating in US inflation data, which drove up US government bond yields. The US CPI for April 2026 rose 3.8% year-on-year, the highest since May 2023, due to the impact of surging oil prices from the war with Iran. Geopolitical uncertainty in the Middle East remains high after hopes for US-Iran peace dimmed again. The combination of hot inflation, high oil prices, and geopolitical risks has made markets increasingly doubtful about the chances of a Federal Reserve rate cut this year. Nevertheless, the rupiah was still able to strengthen amid high interest in safe-haven assets, particularly the US dollar. Typically, a strong US dollar condition can limit the room for strengthening of other countries’ currencies, including the rupiah. Developments in the stock market also drew the attention of market players. Morgan Stanley Capital International (MSCI) officially announced the results of its global index review for the May 2026 period. As a result, Indonesia faced significant pressure after six domestic stocks were removed from the MSCI Global Standard Index, while no new Indonesian stocks were added to the index. On the other hand, in the MSCI Global Small Cap Indexes, one Indonesian stock was added, namely PT Sumber Alfaria Trijaya Tbk (AMRT). However, 13 Indonesian stocks were removed from the MSCI small cap index. All these changes will take effect at the close of trading on 29 May 2026. This situation raises expectations of increased capital outflows from the domestic stock market. Ultimately, this could add pressure on the rupiah. Amid these sentiments, the rupiah’s strengthening is also expected to be supported by anticipated policy support from the government to help stabilise the domestic financial market. Finance Minister Purbaya Yudhi Sadewa stated that the Ministry of Finance would begin assisting Bank Indonesia in controlling rupiah exchange rate pressures against the US dollar today, Wednesday (13/5/2026). Purbaya explained that one scheme to be utilised is the bond stabilisation fund or Bond Stabilization Fund (BSF). This instrument is expected to help dampen pressures in the government securities market, which in turn will support rupiah stability.