The rupiah opened slightly stronger against the US dollar on Wednesday morning, at 17,990 per dollar, ahead of Bank Indonesia’s interest rate announcement that afternoon. The move was small, about 2 rupiah or 0.01 percent, against the previous close of 17,992 per dollar. Bloomberg spot data showed the opening rate.
Lukman Leong, an analyst at Doo Financial, said the rupiah was expected to consolidate against the dollar, with potential to strengthen if markets anticipated a rate hike at the central bank’s board meeting that afternoon.
Global rate pressure builds
Luthfi Ridho, lead expert staff at the Dewan Ekonomi Nasional (DEN), warned of pressure on the rupiah if Bank Indonesia is slow to respond to rising global interest rates. He said inflation spikes in several countries had pushed central banks, including the Fed, to tighten policy, and that the market consensus expected the Fed to raise rates once more soon.
The Fed, the European Central Bank and the Bank of Japan each raised rates by 25 basis points in September 2026, according to the article’s account. The Fed policy rate now stands at 4 percent, the ECB’s at 2.50 percent and the BoJ’s at 1.25 percent.
Yield gap a concern
Ridho said that if the policy rate did not adjust, the rupiah exchange rate was what would most commonly move.
Lukman Leong said domestic equity market sentiment would continue to drive the rupiah. If sentiment improved again, he said, it would support the currency.
Related: Rupiah slides to 18,000/dollar on MSCI reclassification news · Rupiah falls to 18,024 per dollar amid oil, equity outflows
Source: European Central Bank · Bank of Japan
