Rupiah Weakens on Increased Demand for US Dollar

The rupiah weakened by 114 points, or 0.63 percent, to close at Rp18,128 per US dollar in Thursday’s trading, down from the previous close of Rp18,014 per US dollar. Muhammad Amru Syifa, Research and Development at the Indonesia Commodity & Derivatives Exchange (ICDX), stated that the depreciation was triggered by increased demand for the US dollar as a safe-haven asset following renewed conflict between the United States and Iran. He added that the rise in West Texas Intermediate (WTI) crude oil prices to around US$74 per barrel heightened concerns over global inflation and reinforced expectations that the Federal Reserve will maintain relatively high interest rates. Market participants are also awaiting the release of US initial jobless claims data, which could provide further clues on the direction of the Fed’s monetary policy. From a domestic perspective, Indonesia’s economic fundamentals are considered relatively sound, helping to limit pressure on the rupiah. This is reflected in the country’s foreign exchange reserves, which rose to US$145.6 billion at the end of June 2026, up from US$144.9 billion the previous month. The increase strengthens Bank Indonesia’s ability to maintain exchange rate stability amid rising global uncertainty. Controlled inflation and Bank Indonesia’s commitment to maintaining stability through a mix of monetary policies are also seen as supporting factors. However, in the short term, the rupiah’s movement is expected to be influenced more by global sentiment than domestic factors. The Bank Indonesia Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened to Rp18,090 per US dollar from Rp18,005 per US dollar previously.