Rupiah Projected to Weaken, Potentially Break Rp18,000 per US Dollar

JAKARTA - The rupiah exchange rate in Friday, May 29, 2026 trading is projected to weaken again against the US dollar (USD).

Based on Bloomberg data as of 09.10 WIB, the rupiah was at the level of IDR17,853 per US dollar, down 7.5 points or weakening 0.04 percent.

Previously, referring to Bloomberg data on Thursday, May 28, 2021, the spot rupiah closed down 0.25 percent to Rp17,845 per US dollar.

President Commissioner of HFX International Futures Sutopo Widodo said the rupiah is expected to still move volatile with a tendency to weaken in the range of Rp17,800 to Rp17,900 per US dollar.

According to him, if the released US economic data shows results much stronger than market expectations, the US dollar has the potential to gain additional momentum to push the rupiah exchange rate to the level of Rp17,950 even breaking Rp18,000 in the short term.

"In the midst of this sensitive market condition, prioritizing risk management and the principle of capital preservation is the wisest step that can be taken," he told VOI, Friday, May 29.

Sutopo added that the movement of the rupiah in the previous trading which was in the range of Rp17,854 per US dollar reflected the large pressure due to the combination of global sentiments and domestic factors.

According to him, geopolitical tensions in the Middle East after the US attack on an Iranian military base triggered a flight to safety, so that the US dollar index (DXY) approached its highest level in the last seven weeks in the area of 99.

In addition, he said, global market participants are also anticipating the release of US core Personal Consumption Expenditures (Core PCE) inflation data which is expected to increase to 3.3 percent.

Sutopo said this condition strengthens the expectation that high interest rates will last longer (higher for longer), as well as providing additional pressure on emerging market currencies.

On the domestic side, Sutopo said the weakening of the rupiah was also influenced by seasonal factors in the second quarter, where foreign exchange demand increased for the need for repatriation of corporate dividends and foreign debt payments.

He added that although Bank Indonesia had raised the BI-Rate by 50 basis points to 5.25 percent in mid-May, the rapid outflow of capital and the weak momentum of domestic trade made intervention in the spot market one of the main steps to maintain the stability of the rupiah.

"The cautious attitude of market participants has also increased ahead of the release of May inflation data and the trade balance next week," he concluded.