Rupiah Strengthens Further, US Dollar Falls Below Rp18,000

The rupiah closed sharply stronger against the US dollar on Thursday, successfully breaching the psychological level of Rp18,000. The currency appreciated by 0.44% to close at Rp17,970 per US dollar, marking its strongest position in the past week. Throughout the trading session, the rupiah moved within a range of Rp17,970 to Rp18,070 per US dollar.

The rupiah’s strengthening was supported by the persistent weakening of the US dollar in global markets. Market participants were seen selling off US dollar-denominated assets, creating room for other currencies, including the rupiah, to appreciate. The US dollar weakened against several major world currencies after US producer price data came in lower than expected, reinforcing signs of easing inflationary pressures in the United States.

The Producer Price Index for final demand fell 0.3% in June 2026, reversing a revised 0.6% increase in May. The figure was lower than market expectations, which had anticipated no change. The softer producer price data bolstered the view that the US Federal Reserve can remain patient in determining the direction of interest rates. However, markets remain cautious regarding the latest escalation between the US and Iran, which has kept oil prices near one-month highs and poses a lingering risk to the inflation outlook.

On the domestic front, Bank Indonesia continues its efforts to maintain rupiah stability. Senior Deputy Governor Destry Damayanti revealed that the central bank has been intervening in the offshore Non-Deliverable Forward market since April 2026. BI has also granted exemptions to certain primary money market and foreign exchange dealers from the ban on selling foreign currency against the rupiah in offshore NDF markets, a policy aimed at supporting exchange rate stability and deepening domestic financial markets.