Rupiah Volatile Amid Middle East Tensions and US Monetary Policy Watch

The Indonesian Rupiah is expected to experience continued volatility on Friday, July 17, 2026, as market participants cautiously monitor developments in US monetary policy and escalating global geopolitical tensions. Ibrahim Assuaibi, an observer of economics, currency, and commodities, projects that the Rupiah will remain influenced by external sentiments, particularly the direction of Federal Reserve interest rates, the movement of the US dollar, and the potential impact of Middle East conflict developments on global oil prices. "For the trading day of Friday, July 17, 2026, the Rupiah currency is expected to be volatile but close lower in the range of Rp 17,986 - Rp 18,030," Assuaibi stated in his remarks on Friday (17/7/2026). In contrast, the Rupiah closed with gains on Thursday, July 16, 2026, at Rp 17,986 per US dollar, amid receding concerns over US interest rate policy. "In this afternoon's trading (Thursday-ed), the Rupiah currency closed up 82 points, having previously strengthened by 85 points to Rp 17,986 from the previous closing level of Rp 18,068," he added. Domestically, the government is preparing fiscal and market measures to control inflation, especially concerning volatile food commodities and rising industrial costs. Several mitigation steps are being taken to manage the inflation rate, particularly from the volatile food component and production costs that could lead to price increases. "The government will also address the volatile food component to prevent it from putting pressure on inflation. Additionally, the government is paying attention to the increase in packaging prices, which also impacts food products," he explained. Furthermore, Bank Indonesia (BI) claims its independence is recognized by global rating agencies, following a report from S&P Global Ratings (S&P) regarding Indonesia's debt rating and outlook. Previously, BI's independence was a point of focus for two rating agencies, Moody's and Fitch Ratings. S&P Global Ratings continues to trust the independence of Indonesia's monetary institution, allowing BI to make decisions such as raising the benchmark interest rate (BI-Rate) to 5.75%. BI's independence is further supported by sustainable fiscal authority policies. "As a result, the monetary authority can implement policies that are positive for the Indonesian economy. Bank Indonesia remains committed to strengthening the mix of monetary, macroprudential, and payment system policies to enhance stability and contribute to sustainable economic growth," he concluded. Source: Liputan6