US Dollar Breaches Rp17,900 Mark Amid Global Strength
Jakarta, CNBC Indonesia - Pressure on the rupiah has yet to subside. The Indonesian currency opened in the red against the US dollar on Wednesday (24/6/2026), depreciating 0.36% to Rp17,900/US.Thisextendedthepreviousday′slosses, whentherupiahclosed0.06.
Meanwhile, the US Dollar Index (DXY), which measures the greenback against six major currencies, edged up 0.03% to 101.432 as of 09.00 WIB, marking its strongest position in 13 months. This continued the sharp 0.38% gain recorded in the prior session.
The global strengthening of the dollar reflects robust market appetite for greenback-denominated assets, limiting the room for appreciation of other currencies, including the rupiah. The dollar’s rise to its highest level in over a year comes as markets adjust expectations towards a more hawkish Federal Reserve.
The Fed’s policy meeting last week, the first under new Chair Kevin Warsh, was interpreted as a signal that the US central bank remains open to raising interest rates this year. Expectations for a rate hike have surged, with CME FedWatch showing the probability of a hike at the July meeting jumping to 36.3% from 8.5% a week earlier, while the chance of a September hike rose to 69.1% from 29.1%.
The prospect of higher-for-longer global interest rates is also a concern for Bank Indonesia (BI). Senior Deputy Governor Destry Damayanti noted that the rupiah is not alone in facing depreciation pressures. “We see that almost all countries are experiencing exchange rate weakening, because we are currently facing a global situation termed ‘higher for longer’,” she told CNBC Indonesia.
Destry said these global conditions require BI to maintain the attractiveness of rupiah financial instruments, particularly for foreign investors. Consequently, BI has raised its benchmark interest rate by 100 basis points over the past month. “We hope that with higher interest rates, it will increase the attractiveness of our rupiah instruments for offshore or foreign investors,” she added.
The market also perceives that the Fed could keep rates elevated for an extended period and may even hike further this year. “So the market sees that the Fed will maintain its high interest rate stance, and it is even expected to increase this year,” Destry said.
Given these conditions, BI is expected to remain cautious in setting its policy direction, focusing on preserving the appeal of rupiah assets to support capital inflows and exchange rate stability. “We must maintain the attractiveness of our financial instruments. In the current situation, we should not even be talking about lowering the BI Rate,” she stressed.
Beyond the Fed’s policy direction, the market is also awaiting further US inflation data this week, specifically the Personal Consumption Expenditures (PCE) Price Index for May. This data will serve as a key indicator of whether inflationary pressures in the US are persisting or beginning to ease.