US Dollar Strengthens, Rupiah Closes Weaker at Rp18,075/US$
The Indonesian rupiah closed weaker against the United States (US) dollar on Thursday. Pressure on the Garuda currency mounted as the US dollar reversed course and strengthened in global markets.
According to Refinitiv data, at the close of trading on Thursday (30/7/2026), the rupiah depreciated by 0.17% to Rp18,075 per US dollar. The rupiah’s weakening deepened compared to its opening position this morning. The Garuda currency opened slightly lower, down 0.03% at Rp18,050 per US dollar, before losing 25 points by the close.
Meanwhile, the US dollar index (DXY), which measures the greenback’s strength against a basket of six major world currencies, was observed strengthening by 0.17% to 101.052 as of 15.00 Western Indonesia Time. This strengthening came after the DXY had slumped 0.52% to 100.886 in the previous session, reacting to the US central bank’s (The Federal Reserve) decision to maintain its benchmark interest rate.
The initial positive sentiment following The Fed’s decision faded after the conflict between the US and Iran heated up again. The dollar received a boost from safe-haven demand after the US stated it was launching airstrikes in Iran. The DXY, which had fallen sharply after the Federal Open Market Committee (FOMC) meeting results were announced, subsequently rebounded during Asian trading, adding pressure to the rupiah.
In its meeting that concluded on Wednesday US time, The Fed maintained its benchmark interest rate in the range of 3.50%-3.75%. The decision was in line with the majority of market participants’ expectations. However, the decision was not unanimous. Three out of the 12 FOMC members dissented, preferring a 25 basis point rate hike at this meeting. The split vote indicates persistent concerns regarding inflationary pressures. The Fed assessed that current interest rates remain sufficiently high to restrain economic activity and help bring inflation back down.
The future policy direction has also become more difficult to predict after Fed Chair Kevin Warsh stressed that the central bank would no longer provide forward guidance on interest rate movements. Warsh affirmed that The Fed remains ready to act if necessary to return inflation to its 2% target. Any subsequent decisions will be highly dependent on incoming economic data. According to the CME FedWatch Tool, Fed funds futures contracts are now pricing in a 34.9% probability that The Fed will hold rates steady again at its meeting concluding on 16 September 2026. This probability has increased from 24% before the latest meeting results were announced. Market participants will now closely scrutinise upcoming US inflation and labour market data to gauge the policy direction for September.