Why the US Dollar Is So Strong, Surging Past Rp18,000

The US dollar has grown increasingly strong in recent weeks, leaving currencies around the world, including the rupiah, under pressure.

At 12.30pm local time on Friday (23 October 2026), the rupiah stood at Rp18,079 per US dollar, weaker than its close of Rp18,045 the previous trading day.

Firman Mochtar, head of Bank Indonesia’s Monetary and Economic Policy Department, said the dollar’s strength came as US Treasury yields had remained above 5% for an extended period.

Investors have become less inclined to invest in emerging markets, including Indonesia. This has increased demand for the US dollar and driven the US Dollar Index higher.

“The impact is that the DXY, the dollar currency index against developed-market currencies, has strengthened. Yesterday it was recorded at 101,” Firman said at a media briefing at Bank Indonesia’s headquarters in Jakarta on Friday (23 October 2026).

“When it strengthens, emerging-market currencies weaken, including Indonesia’s,” he added.

Firman also said MSCI’s announcement that it would discuss classifying Indonesia’s stock market as a standalone market had put pressure on the rupiah.

“So there are capital outflows, global pressures and domestic pressures. In general, these are weighing on the rupiah exchange rate. That is what is happening,” he said.

At 12.30pm local time on Friday (23 October 2026), the rupiah stood at Rp18,079 per US dollar, weaker than its close of Rp18,045 the previous trading day.