Rupiah Weakens to 17,602 on Fed Expectations and Middle East Tensions

The Indonesian rupiah has weakened to 17,602 per US dollar on Saturday morning, May 16, 2026, following a long weekend that saw it slide to 17,600 per dollar on Friday.

Traders are keeping a close eye on the U.S. Federal Reserve's policy path, which they believe will not lead to rate cuts in 2026 due to high inflation and rising gasoline prices in America.

Ibrahim Asuaibi, Director of PT Traze Andalan Futures, said that the leadership change at the Fed from Jerome Powell to Kevin Warsh has also contributed to the rupiah's decline.

Asuaibi predicts that if the currency breaches 18,000 per dollar by the end of May, it could weaken further to 22,000 per dollar. He expects Bank Indonesia to raise the benchmark interest rate next June in response.