Rupiah Reaches IDR 16,684 Per US Dollar, Domestic Monetary Policy Triggers

JAKARTA - The rupiah exchange rate moved lower against the United States (US) dollar in trading Wednesday, September 24, 2025.

To note, citing Bloomberg, on Wednesday, September 24, 2025, the rupiah spot exchange rate closed higher by 0.02 percent to the level of Rp. 16,684 per US dollar. Meanwhile, the Jakarta Interbank Spot Dollar Rate (Jisdor) exchange rate of Bank Indonesia (BI) closed down 0.26 percent to a price level of Rp. 16,680 per US dollar.

International HFX President Commissioner Berjangka Sutopo Widodo said that Rupiah was under pressure again today, breaking the psychological level of Rp16,684 per US dollar and this movement reflects the turmoil of global and domestic sentiment.

According to him, the weakening was largely triggered by a sharp rebound in the US Dollar Index after Federal Reserve Chairman Jerome Powell expressed caution against further interest rates lowering.

"His statement indicates that the policy easing route is still uncertain, strengthens the dollar's appeal and encourages investors to withdraw capital from risky assets, including the Rupiah," he told VOI, Wednesday, September 24.

He added that this situation shows that the monetary policy of the US Central Bank remains the main factor affecting the direction of the foreign exchange market.

On the other hand, Sutopo explained that domestic monetary policy also contributes to this pressure.

"Bank Indonesia's decision to cut the benchmark interest rate by 150 basis points since September 2024, although it aims to support growth, has reduced the attractiveness of investment in the domestic financial market," he explained.

According to him, the widening yield gap with US assets makes Rupiah more vulnerable to capital outflows.

In addition, he said that market concerns over fiscal factors, such as the independence of Bank Indonesia and new government ambitious plans that require large financing, also exacerbated the situation, as reflected in the projected higher 2026 budget deficit than the initial proposal.