US Dollar Hits Rp 17,900: What is Happening to the Rupiah?

The exchange rate of the Rupiah continued to decline during trading on Wednesday (3/6/2026). According to Refinitiv data, as of 09:26 WIB, the Rupiah weakened by 0.39% to the level of Rp 17,900/US.Thislevelmarksthelatestall − timelowfortheRupiahagainstthegreenback.AfterbreakingthroughthepsychologicallevelofRp17, 900/US, the Rupiah is now approaching the next psychological threshold of Rp 18,000/US$.

Faisal Rachman, Head of Macroeconomics & Market Research at Permata Bank, revealed that there are two primary factors causing the current weakness in the Rupiah exchange rate. From an external perspective, the uncertainty surrounding geopolitical tensions in the Middle East persists. Furthermore, the US Dollar Index (DXY) has strengthened following the release of the latest US labour market data, which indicates US economic resilience, thereby increasing expectations that the Fed will maintain a hawkish stance this year. This implies that the window for a Fed rate cut is steadily shrinking.

“Domestically, seasonal patterns in the second quarter are still ongoing. The payment of returns and interest from domestic financial assets as well as external debt continues this June,” Faisal told CNBC Indonesia.

Additionally, he noted that the trade surplus tends to continue decreasing amidst pro-growth policies that increase import demand, alongside rising prices for imported goods due to shocks in the global supply chain. Despite the volatility, he believes the Rupiah is unlikely to breach the Rp 18,000/US$ level, provided that global conditions remain stable. He confirmed that he will continue to monitor current global conditions. “We will continue to monitor the situation. If the global situation does not improve, then risks will indeed exist,” he said.