Rupiah Weakens to Rp17,845 per US Dollar on Fed Rate Hike Prospects
The exchange rate of the Rupiah against the US Dollar weakened in trading on Friday morning (19/6/2026). Pressure on the Rupiah occurred alongside increasing prospects of interest rate hikes by the US central bank, the Federal Reserve, following the Federal Open Market Committee (FOMC) meeting.
Based on market data on Friday morning at 10:46 WIB, the Rupiah moved weaker by 51 points or 0.29 per cent to the level of Rp17,845 per US Dollar. This position is lower than the previous trading close, which stood at Rp17,794 per US Dollar.
Currency analyst at Doo Financial Futures, Lukman Leong, explained that the strengthening of the US Dollar is driven by inflation in the United States, which currently touches 4.2 per cent. This figure is considered still far from the price stability target of 2 per cent set by the Fed.
Federal Reserve Chair Kevin Warsh reaffirmed his commitment to achieving that inflation target as a long-term goal. This stance has triggered market expectations that tight monetary policy will continue, which in turn has pushed the US Dollar Index to its highest level in over a year.
In addition to interest rate factors, concerns over the global crude oil supply due to geopolitical conflicts have also supported the strength of the greenback. Nevertheless, the existence of a first-stage peace agreement between the US and Iran has provided a slight positive sentiment, preventing a deeper fall in the Rupiah.
From within the country, several fundamental factors are maintaining investor confidence. The decision by Morgan Stanley Capital International (MSCI) to maintain Indonesia’s status as an Emerging Market (EM) provides certainty in the capital market.
Regarding monetary policy, Bank Indonesia’s (BI) move to raise the BI-Rate is considered a crucial step to stabilise the exchange rate. The market projects that BI still has room to raise the benchmark interest rate by approximately 50 basis points (bps) in the future to shield the Rupiah from global volatility.
Considering these various factors, the movement of the Rupiah throughout the day is predicted to fluctuate in the range of Rp17,800 to Rp17,900 per US Dollar.