The Indonesian rupiah traded at Rp17,887 against the US dollar at the close of trading on Wednesday, October 7, 2026, marking a modest gain of 12 points or 0.07 percent, according to Market. This slight recovery followed a volatile stretch that saw the currency touch a low of Rp18,019 the prior week amid surging global oil prices and shifting Federal Reserve rate expectations, as reported by Epaper Media Indonesia. On Wednesday, the currency opened higher at Rp17.866 per US dollar, up 33 points or 0.18 percent from its previous close of Rp17.899 per US dollar, before moving through an intraday low of Rp17.888 per US dollar.
Federal Reserve Expectations Drive Currency Movements
Doo Financial Futures analyst Lukman Leong noted that currency movements stayed constrained because market participants adopted a wait-and-see stance regarding the minutes from the Federal Open Market Committee (FOMC) meeting, as cited by ANTARA News. Market participants were analyzing the September Federal Reserve discussions to gauge policymakers’ inflation assessments and future interest rate paths, according to ANTARA News, citing Anadolu reporting. According to CME FedWatch data reported by Xinhua, market participants estimated a 24 percent probability for an interest rate hike at the Federal Reserve’s October meeting, down from 71 percent the prior week.
Asian currencies show mixed performance against US dollar
Asian currency performance remained mixed on Wednesday, with several regional peers registering gains against the US dollar alongside the rupiah. Taiwan’s New Taiwan dollar led regional appreciations with a 0.07 percent rise, while the Chinese yuan, Japanese yen, Indian rupee, and Malaysian ringgit posted smaller ticks upward, per Market. Conversely, the Philippine peso fell 0.27 percent and South Korea’s won dropped 0.21 percent. Developed market currencies faced heavier downward pressure against the greenback, with Europe’s euro sliding 0.57 percent, the British pound declining 0.28 percent, and the Australian dollar slipping 0.17 percent, according to CNN Indonesia.
Domestically, Indonesia’s foreign exchange reserves (cadev) dropped from a higher level at the end of August 2026, though the contraction proved milder than anticipated, offering a stabilizing floor for the local currency, according to ANTARA News and CNN Indonesia. At the same time, structural pressures persist for Indonesian enterprises. Epaper Media Indonesia reported that manufacturing dependence on imported raw materials, components, energy, and machinery leaves industrial margins vulnerable to rupiah depreciation, increasing production costs as firms deal with elevated global energy prices.
What drove the rupiah to trade near Rp18,019?
What drove the rupiah to trade near Rp18,019 per US dollar the previous week?
Epaper Media Indonesia reported that the rupiah dipped to Rp18,019 per US dollar due to climbing global oil prices and heightened market expectations for tighter monetary policy from the US Federal Reserve.
How much did Indonesia’s foreign exchange reserves change by October 2026?
According to ANTARA News, Indonesia’s foreign exchange reserves decreased from the end of August 2026 down to early October.
What were the expectations for a Federal Reserve rate hike in October 2026?
Market participants estimated a 24 percent probability of an interest rate hike at the Federal Reserve’s October meeting, according to CME FedWatch data cited in ANTARA News.
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