The Fed Holds Reference Interest Rate, Will the Capital Market and Rupiah Exchange Rate Come Under Pressure?

JAKARTA, KOMPAS.com - The US Federal Reserve (The Fed) has decided to hold its reference interest rate. For Indonesia, this is feared to cause the capital market and the rupiah exchange rate against the US dollar to weaken. Economist and Director of the Digital Economy at the Center of Economic and Law Studies (Celios), Nailul Huda, stated that the Fed’s unchanged reference interest rate will keep US financial markets attractive to investors. In other words, the incentive for investors to hold funds in emerging markets will decrease. “They will prefer to place their money in the US money market rather than in emerging countries,” he told Kompas.com on Thursday (19/3/2026). “As a result, I think capital outflow will still occur in Indonesia,” he added. Nailul explained that the exit of foreign capital from Indonesia impacts several financial sectors simultaneously. This sentiment could cause the Composite Stock Price Index (IHSG) to fall. Meanwhile, the rupiah exchange rate could weaken against the US dollar. “Interestingly, gold prices could correct again,” Nailul said. Besides that, Nailul mentioned that there is a policy that was recently corrected, which could cause the rupiah to weaken. The policy to lower the transaction limit, which was then clarified and not implemented, could lead to the outflow of US dollars from banking. “It seems the rupiah movement will weaken slightly during this Eid holiday,” Nailul said.