August 1, 2026 | 10:13 pm
TEMPO.CO, Jakarta - The Indonesian rupiah strengthened by 89 points in the spot market on Friday, July 31, 2026, closing at Rp18,022 per US dollar compared with the previous trading day. Analysts expect the currency to remain around the Rp18,000 level next week.
Data from the Jakarta Interbank Spot Dollar Rate (JISDOR) showed the rupiah traded at Rp18,058 per US dollar on Friday. The currency has stayed above the Rp18,000 mark since July 28, after trading in the Rp17,000 range from July 17.
Currency and commodity analyst Ibrahim Assuaibi, director of PT Traze Andalan Futures, predicted the rupiah would remain volatile in the coming week, with potential movement between Rp18,020 and Rp18,070 per US dollar.
“The rupiah is expected to fluctuate but close weaker within the range of Rp18,020 to Rp18,070 per US dollar,” Ibrahim said in a statement quoted on Saturday, August 1.
Global Factors Drive Rupiah Movement
The rupiah’s appreciation at the end of last week was supported by a weaker US dollar index. Ibrahim said the decline was partly influenced by falling crude oil prices amid the ongoing Middle East conflict, along with signs of improving shipping activity through the Strait of Hormuz.
Global oil prices have fluctuated since March 2026 and briefly exceeded US$100 per barrel several times. By the end of July 2026, oil prices had eased to around US$88 per barrel.
However, geopolitical risks remain. Yemen’s Iran-aligned Houthi group recently announced a naval blockade targeting Saudi Arabia, raising concerns over the country’s oil export routes through the Red Sea, an alternative route to the Strait of Hormuz.
Another factor affecting the rupiah was the US Federal Reserve’s decision to keep its benchmark interest rate unchanged at 3.50–3.75 percent following lower-than-expected US inflation data.
“The Federal Reserve maintained its interest rate as expected, while Chair Kevin Warsh did not provide a clear signal regarding the central bank’s future plans on inflation and interest rates,” Ibrahim said.
Domestic Economic Sentiment
From the domestic front, Ibrahim highlighted the Constitutional Court’s ruling requiring Indonesia’s Free Nutritious Meals (MBG) program budget to be separated from education spending. The separation must be implemented no later than the 2028 state budget.
He said the ruling could strengthen governance reforms surrounding President Prabowo Subianto’s flagship program.
Meanwhile, inflation is expected to ease in July 2026 as food price pressures decline and government-regulated price adjustments normalize.
However, economists warned that inflation risks remain due to the rupiah’s depreciation, potential El Niño impacts, and rising food demand, which could push prices higher in the second half of the year.
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