FOREIGN EXCHANGE PRESSURE: RUPIAH AT THE PSYCHOLOGICAL THRESHOLD
Indonesia's foreign exchange market faced significant pressure during Monday's (September 28, 2026) trading session. According to Refinitiv data cited by CNBC Indonesia, the rupiah ended the session at Rp17,965 per US dollar, depreciating by 0.53% from the previous level. This position has raised concerns among market participants, as it sits just 35 points away from the psychological barrier of Rp18,000/USD.
The pressure was evident from the market open, where the rupiah started 0.22% lower at Rp17,920/USD. This movement reflects investor anxiety over unresolved global dynamics.
Driving Factor: The 'Strong Dollar' Phenomenon
Bank Indonesia Governor Destry Damayanti provided a technical perspective on the primary cause of this weakness. In the Evening Up CNBC Indonesia program, Destry explained that the strengthening of the US dollar against other currencies, known as the 'Strong Dollar', is largely driven by the trend of rising benchmark interest rates by The Fed.
"The phenomenon of dollar strength to date is more caused by the trend of rising benchmark interest rates by the US Central Bank, The Fed, which has recently reached the level of 3.75% to 4%," Destry stated.
This situation creates capital outflows from emerging market economies, including Indonesia, as dollar-denominated asset yields become more attractive to global investors.
Government Response: Focus on Fundamentals & Exports
Amid the exchange rate volatility, the government has adopted a calm yet strategic approach. Coordinating Minister for Economic Affairs Airlangga Hartarto emphasized that the rupiah's weakness does not fully reflect Indonesia's economic fundamentals, which he believes remain quite good.
"We are monitoring the situation first. The government will certainly boost exports to increase foreign exchange earnings," Airlangga said at the Presidential Complex in Jakarta.
This statement implies that the government will not alter its macroeconomic assumptions for next year. The exchange rate assumption in the 2027 State Budget (RAPBN) remains maintained at Rp17,500/USD, indicating the government's confidence in foreign exchange recovery through trade channels.
| Parameter | Value/Latest | Context |
|---|---|---|
| Closing Rate (Sept 28, 2026) | Rp17,965/USD | Down 0.53% |
| Psychological Level | Rp18,000/USD | 35 points away |
| Fed Interest Rate | 3.75% - 4% | Trigger for 'Strong Dollar' |
| 2027 Budget Assumption | Rp17,500/USD | Maintained |
Impact Analysis on Real Assets & Portfolios
We assess that the government's export-focused approach will have a direct impact on sectors that are the backbone of foreign exchange earnings. Listed companies on the IDX Index with high export exposure, particularly in the energy commodities (oil and gas) and gold sectors, have the potential to serve as a natural hedge for domestic investors.
When the rupiah weakens, the revenue of companies denominated in US dollars increases when converted to rupiah, thereby boosting net profit margins. Conversely, sectors heavily reliant on imported raw materials or carrying large foreign currency debts will face higher cost pressures.
For investors exposed to US Tech, the 'strong dollar' phenomenon typically correlates negatively with global technology stock valuations due to capital repatriation to the US. However, for Indonesian investors, diversification into physical commodity assets like gold can be an effective strategy for mitigating short-term currency volatility risks.
This article is based on factual data from CNBC Indonesia and independent analysis by the AI Intelligence Desk. It does not constitute a solicitation to buy or sell specific assets.
Sources
- Rupiah Near Rp18,000, Airlangga: Exports Must Be Boosted! — CNBC Indonesia
- Video: BI Governor: World Currencies Face "Strong Dollar" — CNBC Indonesia