Rupiah Weakens on Sentiment from Perry's Resignation and the Fed

The rupiah exchange rate against the US dollar weakened at the close of trading on Monday, falling 46 points or 0.26 percent to Rp 18,009 per US dollar, compared to the previous close of Rp 17,963 per US dollar. Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened today to Rp 17,995 per US dollar from Rp 17,973 per US dollar previously. Money market analyst Ibrahim Assuaibi assessed that the rupiah’s depreciation was due to both domestic and external factors. Domestically, sentiment stemmed from the resignation of Perry Warjiyo from his position as Governor of Bank Indonesia. Senior Deputy Governor Destry Damayanti will serve as Acting Governor until a definitive governor is appointed. Externally, according to Ibrahim, the currency was influenced by the potential for a Federal Reserve interest rate hike. ‘The potential for an increase remains limited because market sentiment is still tied to the Fed’s narrative, which tends to be hawkish,’ Ibrahim said, as quoted by Antara in Jakarta on Monday, 27 July 2026. According to the CME FedWatch Tool, the market now sees a 78 percent chance of an interest rate hike in September 2026. At its meeting on 28-29 July 2026, the Fed is expected to keep interest rates unchanged. Another sentiment came from supply chain disruptions due to the US war with Iran and the conflict between Yemen’s Houthis and Saudi Arabia, which has slowed the number of commodity transport ships crossing the Strait of Hormuz and the Bab el-Mandeb Strait.