Rupiah weakens to Rp18,009 amid potential Fed rate hike

Jakarta (ANTARA) - The rupiah exchange rate against the US dollar weakened by 46 points, or 0.26 per cent, at Monday’s close to Rp18,009 per US dollar, compared with the previous close of Rp17,963 per US dollar.

Money market analyst Ibrahim Assuaibi attributed the rupiah’s weakening to the potential for a Federal Reserve (The Fed) 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,” he told ANTARA in Jakarta on Monday.

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

Another source of sentiment stems from supply chain disruptions caused by the US war with Iran and the Houthi of Yemen against Saudi Arabia, which have slowed the number of commodity-carrying ships passing through the Strait of Hormuz and the Strait of Bab el-Mandeb.

Domestically, sentiment was influenced by 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.

Bank Indonesia’s Jakarta Interbank Spot Dollar Rate (JISDOR) also weakened today to Rp17,995 per US dollar, from Rp17,973 previously.