Rupiah Weakens After Bank Indonesia Holds Interest Rate

The rupiah exchange rate in the domestic spot market weakened to Rp 17,917 per US dollar at the close of trading on Wednesday, 22 July 2026. Meanwhile, Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) closed at Rp 17,909 per US dollar.

Director of PT Traze Andalan Futures, Ibrahim Assuaibi, stated that the exchange rate movement was partly influenced by Bank Indonesia’s decision to hold its benchmark interest rate, the BI-Rate, at 5.75 percent. “BI is expanding incentive policies and a number of other policies to increase foreign portfolio inflows and strengthen rupiah exchange rate stability, accelerate the deepening of money and foreign exchange markets, and increase liquidity,” he said in a written statement on Wednesday, 22 July 2026.

Another factor is the State Budget (APBN), which recorded a deficit of Rp 196.5 trillion at the end of June 2026. State revenue was recorded at Rp 1,459.54 trillion, or 46.3 percent of the target, while state expenditure reached Rp 3,842.7 trillion, or 43.1 percent of the target. This means, Ibrahim noted, that state spending still exceeds state revenue.

On the global front, exchange rate movements were influenced by escalating military clashes between the US and Iran. According to Ibrahim, the latest developments in the conflict have raised concerns about exports from one of the world’s largest crude oil suppliers.

“Expectations that the Fed may increase the pace of interest rate hikes in 2026 have risen sharply, driven by high oil prices as supply disruptions in the Gulf stoke inflation fears and trigger speculation about higher rates for a longer period,” he said.