Rupiah Under Pressure, Hits 17,600 per US Dollar During Holiday Weekend

The Indonesian rupiah weakened to 17,600 against the US dollar during the extended holiday weekend on Friday, May 15, 2026. According to Google data, the rupiah reached 17,602 per US dollar by Saturday morning, May 16, 2026.

Ibrahim Assuaibi said the rupiah’s decline was driven by escalating geopolitical tensions in the Middle East. In addition, the US Federal Reserve’s monetary policy has also contributed to the pressure on the Indonesian currency.

He noted that leadership at the Federal Reserve had shifted from Jerome Powell to Kevin Warsh.

Speaking on Friday, May 15, 2026, Ibrahim said, “With inflation in the United States remaining high and fuel prices continuing to rise, inflationary pressures are expected to persist. Therefore, the US central bank is likely to maintain or even raise interest rates in 2026.”

Ibrahim also explained that Bank Indonesia’s capacity to intervene in global markets was limited during the long holiday period. According to him, the lack of intervention contributed to the rupiah’s weakness in offshore trading.

He projected that the rupiah could weaken further to around 18,000 per US dollar by the end of May 2026. He added that if the currency reaches that level, it could potentially depreciate further to 22,000 per US dollar.

If the rupiah falls beyond 18,000 or reaches 22,000 per US dollar, Ibrahim predicted that Bank Indonesia may raise its benchmark interest rate, or BI Rate, in June.

“The increase could range from 25 to 50 basis points. The move would aim to maintain rupiah stability,” he said.

Source : https://en.tempo.co/read/2103862/rupiah-weakens-to-17600-per-us-dollar-following-shift-in-fed-leadership