Stagnant, US Dollar Holds at IDR 17,970 Level This Morning

The rupiah exchange rate opened stagnant against the United States dollar in trading on Wednesday (8/7/2026). Referring to Refinitiv data, the Garuda currency opened at IDR 17,970 per US dollar, relatively unchanged from the previous close. In trading on Tuesday (7/7/2026), the rupiah managed to close 0.08% stronger at IDR 17,970 per US dollar. Although the rupiah opened flat, pressure from the US dollar still needs to be monitored. The US dollar index (DXY), which measures the greenback’s strength against six major world currencies, was observed strengthening 0.10% to 101.126 as of 09.00 WIB. The rupiah’s movement today is expected to be influenced by several sentiments, particularly from external factors. From abroad, market attention is refocused on rising tensions in the Middle East. Escalation occurred again after the United States launched a retaliatory attack on Iran, following reports of attacks on several tankers transiting the Strait of Hormuz. The latest attack has reignited market concerns over potential disruptions to global energy supplies. The Strait of Hormuz is one of the world’s most important oil and gas shipping lanes, so any disruption in the region can immediately trigger worries about energy distribution. Rising oil prices have rekindled inflation fears. For financial markets, increased inflationary pressures could make the US central bank (The Fed) more cautious in determining the direction of its interest rate policy. Market participants are also awaiting the release of the Fed’s June meeting minutes, scheduled for early Thursday morning Indonesia time. The minutes will be scrutinised for further signals regarding the direction of US monetary policy, especially after the latest employment data showed a slowdown. Currently, market participants see a 27.30% probability of a 25 basis point rate hike at the Fed’s 28-29 July meeting. Meanwhile, the probability of rates being held at current levels stands at 72.70%, according to the CME FedWatch Tool. Domestically, Bank Indonesia previously reported an increase in Indonesia’s foreign exchange reserves in June 2026. BI recorded the country’s foreign exchange reserve position at US$145.6 billion at the end of June 2026. This position was slightly higher compared to the end of May 2026, which stood at US$144.9 billion. The development of the foreign exchange reserve position in June 2026 was influenced mainly by tax and service revenues amid government foreign debt payments and Bank Indonesia’s rupiah exchange rate stabilisation policy in response to high global financial market uncertainty, said Ramdan Denny Prakoso, Head of BI’s Communication Department, on Tuesday. The reserve position is equivalent to financing 5.5 months of imports or 5.4 months of imports and government foreign debt payments. This figure also remains above the international adequacy standard of around three months of imports.