Rupiah Weakens to Rp17,967 per US Dollar as Markets Eye Fed Rate Signals

The rupiah exchange rate weakened against the United States dollar on 25 June 2026. The rupiah fell 15 points, or 0.08 percent, to Rp17,967 per US dollar from the previous close of Rp17,952 on Wednesday (24/6). The depreciation occurred amid rising market expectations of a potential Federal Reserve interest rate hike. This sentiment bolstered the US dollar and put pressure on several currencies, including the rupiah. Currency analyst Lukman Leong from Doo Financial Futures said the rupiah is expected to remain under pressure against the dollar as expectations of a Fed rate hike strengthen. ‘The rupiah is expected to weaken against the US dollar amid increasingly strong expectations of a rate hike by the Fed, which has pushed the dollar index to a new 13-month high,’ Lukman told ANTARA on Thursday. Markets are pricing in a 70 percent probability of a Fed rate hike in September 2026, with participants also eyeing the possibility of a further increase in December. Lukman noted that the surge in the US dollar index has been a primary factor weighing on the rupiah in recent days, despite Bank Indonesia’s efforts to maintain exchange rate stability. Investors are also awaiting the release of US Personal Consumption Expenditures (PCE) inflation data, which is expected to rise from 0.3 percent to 0.4 percent. If US inflation remains elevated, the Fed may retain room to maintain a tight monetary policy stance. Domestically, Lukman assessed that there has been no new economic data to serve as a major catalyst for the rupiah. Sentiment remains mixed, with foreign inflows into government bonds (SBN) contrasting with outflows from the equity market. The combination of strong external sentiment and mixed domestic capital flows has kept the rupiah under pressure. Based on these factors, the rupiah is predicted to trade in the range of Rp17,900 to Rp18,000 per US dollar.