Rupiah weakens as high oil prices persist
The rupiah exchange rate against the US dollar weakened at the close of trading on Thursday, falling 38 points or 0.12 percent to Rp18,111 per US dollar from the previous close of Rp18,073 per US dollar.
Analyst Rully Nova from Bank Woori Saudara stated that the rupiah’s depreciation was influenced by global factors, namely a strengthening dollar index and oil prices that remain at high levels.
"The rupiah weakened in today’s trade, influenced by global factors in the form of a strengthening dollar index and oil prices that are still holding at high levels," he said in Jakarta on Thursday.
Although the oil price trend is declining, he continued, it is still far above the price assumption in the state budget (APBN), raising concerns about the impact on the fiscal and trade deficits.
Other sentiment stemmed from the outcome of the Federal Open Market Committee meeting, which pointed towards a hawkish stance from the Federal Reserve, impacting a rise in government bond yields. The 10-year tenor rose 0.5 basis points, while the 2-, 3-, and 6-year tenors rose 1.2, 1.4, and 2.6 bps respectively.
"The 6-year tenor rose the most, 14 bps, even though there was no capital outflow," he noted.
Similarly, Permata Bank Chief Economist Josua Pardede assessed that the rupiah moved within a limited range following the announcement of the US FOMC’s monetary policy.
"In line with market expectations, the Fed maintained the Fed Funds Rate in the range of 3.50-3.75 percent at the July 2026 meeting, and reaffirmed its commitment to restoring price stability," he said.
During the post-meeting press conference, he added, Fed Chair Kevin Warsh stated that the US central bank continues to monitor the rising trend in US Treasury yields, indicating that bond investors have already undertaken some of the financial tightening efforts expected by the central bank.
This statement lowered market expectations for a near-term rate hike, while simultaneously driving up long-term UST yields.
Meanwhile, Bank Indonesia’s Jakarta Interbank Spot Dollar Rate moved stronger today at Rp18,078 per US dollar, compared to Rp18,087 per US dollar previously.