Rupiah Weakens, Approaches 18,000 per US Dollar Again

The rupiah exchange rate against the US dollar weakened, approaching the level of Rp 18,000 per dollar. Currency and commodity analyst Ibrahim Assuaibi attributed the depreciation to projections of slowing economic growth in the second quarter of 2026 and the United States’ decision to impose new tariffs on Indonesia. Quoting Bloomberg, the rupiah fell 26.50 points, or 0.15 percent, to close at Rp 17,962.5 per US dollar on Friday (24/7/2026), compared to Rp 17,936 in the previous session. Assuaibi noted that the government, through the Minister of Finance, estimates the economy grew by 5.4 percent in the second quarter of 2026, a slowdown from the 5.61 percent recorded in the first quarter. Despite the projected slowdown, the government remains optimistic that growth will accelerate in the second half of the year, supported by maintained liquidity and prudent fiscal policy. To sustain economic momentum, the government will ensure adequate liquidity in the economy to support business activity, investment, and public consumption. Another domestic factor weighing on the rupiah is Indonesia’s trade balance, which recorded a deficit for the first time in six years. Statistics Indonesia (BPS) reported a trade deficit of 1.61 billion US dollars in May 2026, breaking a 72-month surplus streak that began in May 2020. Exports in May 2026 were valued at 23.2 billion US dollars, a 5.73 percent year-on-year decline, mainly due to weaker non-oil and gas exports. Meanwhile, imports reached 24.81 billion US dollars, a 22.16 percent year-on-year increase, driven by a 25.17 percent rise in raw materials and auxiliary goods imports to 17.58 billion US dollars. Capital goods imports also increased by 12.7 percent to 5 billion US dollars. Furthermore, the analyst stated that rising global crude oil prices, which have exceeded the revised state budget assumption of 83 US dollars per barrel, are adding pressure on the rupiah and forcing the government to cover a deepening deficit risk. The price increase, triggered by conflict in the Middle East, has the potential to pressure Indonesia’s external performance, from widening the current account deficit to putting further strain on the rupiah in the third quarter of 2026.