Rupiah weakens against US Dollar amid global inflation risks

The Indonesian Rupiah has faced significant downward pressure against the US Dollar, trading in the range of Rp17,700 to Rp17,900 per USD during late September 2026. This depreciation is attributed to several external and internal factors, including the hawkish stance of the US Federal Reserve, rising US bond yields, and geopolitical tensions in the Middle East that have kept oil prices elevated above $100 per barrel.

Market participants are closely monitoring the upcoming Bank Indonesia (BI) Board of Governors meeting. Analysts suggest that BI may consider raising the benchmark interest rate by 25 basis points to combat global inflation risks and stabilize the currency. Additionally, the Financial Services Authority (OJK) is expected to implement new technical regulations regarding a commodity exchange to control prices, a role it will take over from Bappebti by January 2027.

The currency volatility has also influenced domestic financial behavior, with data from the Indonesia Deposit Insurance Corporation (LPS) showing a significant increase in US Dollar-denominated savings accounts among high-net-worth individuals. Meanwhile, Bank Indonesia has affirmed its commitment to market intervention through various mechanisms, including spot transactions and Non-Deliverable Forwards (NDF), to ensure exchange rate stability.