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

The rupiah exchange rate against the US dollar weakened by 46 points, or 0.26 per cent, to Rp 18,009 per US dollar at Monday’s close, compared with the previous close of Rp 17,963 per US dollar.

The Jakarta Interbank Spot Dollar Rate (JISDOR) at Bank Indonesia also weakened to Rp 17,995 per US dollar, from Rp 17,973 previously.

Money market analyst Ibrahim Assuaibi attributed the rupiah’s weakness to both domestic and external factors. Domestically, sentiment stemmed from the resignation of Perry Warjiyo from his post as Governor of Bank Indonesia. Senior Deputy Governor Destry Damayanti will carry out the duties of Acting Governor until a definitive governor is appointed.

Externally, according to Ibrahim, the currency was affected by the potential for a Federal Reserve (The Fed) rate increase.

“The potential for an increase remains limited because market sentiment is still tied to the Fed’s narrative, which tends to be hawkish,” said Ibrahim, as quoted by Antara in Jakarta on Monday, 27 July 2026.

According to the CME FedWatch Tool, markets now see a 78 per cent chance of an interest rate hike in September 2026. Meanwhile, at its meeting on 28-29 July 2026, the Fed is expected to keep interest rates unchanged.

Another source of sentiment came from supply chain disruption caused by the war between the United States and Iran, and between Yemen’s Houthis and Saudi Arabia, which has slowed the number of commodity-carrying vessels passing through the Strait of Hormuz and the Bab el-Mandeb Strait.