The rupiah weakened to close at Rp18,000 per US dollar on Friday 16 October 2026, after Bank Indonesia stepped into the market to slow the slide. The currency had opened the day at 17,980 per dollar, down 0.33 percent, before falling further during the session.
MSCI move cited as trigger
“The MSCI announcement is something that came earlier than expected; they had promised it for November,” he said, adding that the proposal to lower the market’s status led directly to the currency weakening. He said reform must be implemented and progress made visible to both domestic and foreign investors.
MSCI’s consultation is not a final decision. By Refinitiv data, the rupiah’s close marked a 0.45 percent depreciation on the day. The currency had weakened as far as 18,070 per dollar at its lowest point before recovering 70 points by the close.
Bank Indonesia defends the rupiah
Erwin Gunawan Hutapea, Head of Monetary and Securities Asset Management Department at Bank Indonesia, described the central bank’s response. “Bank Indonesia is committed to continuing to be present in the market to maintain rupiah exchange rate stability in line with fundamentals, through consistent intervention via NDF offshore, spot and DNDF domestically, and purchases of government bonds in the secondary market,” he said. He added that outflows of funds from domestic portfolio assets are expected to continue.
Hutapea also pointed to a strengthening dollar driven by global risk-off sentiment as a source of pressure on domestic markets. The DXY index fell on the same day, a divergence suggesting the rupiah’s weakness owed more to domestic sentiment than to broad dollar strength. Indonesia’s foreign exchange reserves stood at $146.3 billion at the end of September 2026.
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Source: Bank Indonesia
