Storm Subsides, Economist Confident Rupiah Could Reach Rp17,500/US$

Jakarta, CNBC Indonesia - The rupiah’s strengthening against the United States (US) dollar accelerated in early week trading on Monday (15/6/2026). Referring to Refinitiv data, as of 09:52 WIB, the rupiah had strengthened 1.04% to Rp17,680/US.ThispositionsawtheGarudacurrencysuccessfullybreachthepsychologicallevelofRp17, 700/US. The rupiah is also moving further away from the Rp18,000/US$ level, which had been a major pressure point recently.

Trimegah Sekuritas Indonesia Chief Economist, Fakhrul Fulvian, estimates the rupiah’s strengthening will continue next week, driven by increasing market confidence in the stabilisation measures taken by the government and Bank Indonesia recently. According to Fakhrul, after experiencing considerable pressure in recent months, the market is beginning to see a clearer and more consistent policy direction in maintaining national economic stability.

“I estimate the rupiah still has the potential to strengthen towards the range of Rp17,500 per US dollar next week. The market is beginning to see that Indonesia’s economic authorities are willing to take the necessary steps to maintain macroeconomic stability and restore investor confidence,” said Fakhrul. He explained that over the past few months, the rupiah had been under significant pressure due to a combination of external factors and rising market concerns over domestic policy direction. However, most of these factors are now showing improvement.

According to Fakhrul, there are three important measures currently forming the foundation for the rupiah’s strengthening. First, Bank Indonesia has demonstrated a strong commitment to exchange rate stability through cumulative interest rate hikes of 75 basis points. This move provides a clear signal to the market that rupiah stability is a top priority and helps increase the attractiveness of Indonesian financial assets. Second, the adjustment of fuel prices, particularly Pertamax, is beginning to improve market perception of Indonesia’s fiscal condition. Although an unpopular policy, this step demonstrates the government’s courage to make necessary adjustments to maintain the sustainability of the state budget (APBN).

Third, efficiency measures and budget adjustments in several government programmes, including the Free Nutritious Meals (MBG) and the Merah Putih Village Cooperatives (KDMP), are starting to be read by the market as a signal that fiscal discipline is once again a priority. “For the past few months, the market has been waiting for evidence that Indonesia is willing to undertake fiscal normalisation. Now those signals are starting to appear. BI has moved through interest rate hikes, while the government is beginning to make fiscal adjustments. This combination is the foundation for the rupiah’s strengthening,” he explained.

According to Fakhrul, the market’s response to these policy changes is becoming quite evident. Last week, the rupiah was recorded as one of the best-performing currencies in the Asian region. “Last week, the rupiah was the second strongest appreciating currency in Asia after the South Korean Won. If the fiscal normalisation process continues and policy consistency is maintained, I see a fairly open opportunity for the rupiah to be one of the best strengthening currencies in the region this week,” he said.

Besides domestic factors, Fakhrul assesses that global geopolitical developments also have the potential to provide additional positive momentum for the rupiah. According to him, improving relations between the United States and Iran, along with the increased likelihood of a more permanent agreement, will help lower global risk premiums, improve sentiment for developing country markets, and reduce pressure on world energy prices. “If the peace process between the United States and Iran continues to move in a positive direction, the momentum for the rupiah’s strengthening could become even stronger. Declining geopolitical risk usually encourages investors to return to emerging market assets, including Indonesia,” said Fakhrul.

For next week, he estimates the rupiah will move in the range of Rp17,450 to Rp17,650 per US dollar with a tendency to strengthen. According to him, the current strengthening of the rupiah is not solely driven by short-term sentiment, but is beginning to be underpinned by improved expectations for Indonesia’s economic policy. “We must remember that over the past few months, the market has questioned whether Indonesia is willing to pay the cost of stabilisation. Now the answer is starting to become visible. BI has raised interest rates, the government is beginning to make fiscal adjustments, and the market is responding with a stronger rupiah. For investors, seeing is believing,” Fakhrul concluded.