Jakarta, Indonesia – The Indonesian Rupiah is exhibiting a degree of volatility but is poised for potential gains against the US dollar, trading in a range of IDR 16,760–16,800 per USD today, . This follows a strengthening trend on , when the Rupiah closed up 0.42% at IDR 16,805 per USD, while the US dollar index experienced a slight decline of 0.19% to 97.44.
The currency’s performance is being shaped by a combination of domestic and international factors. Easing geopolitical tensions in the Middle East are providing some support, as are positive signals from China’s economy. However, upcoming economic data releases from both the US and China will be key determinants of the Rupiah’s trajectory in the coming days.
According to Ibrahim Assuaibi, Director at Traze Andalan Futures, the current market sentiment is influenced by the resumption of nuclear talks between the US and Iran after constructive discussions last Friday. This development has helped to alleviate concerns about a potential military conflict in the region, particularly after the US deployed warships earlier this year. The reduction in perceived risk has also impacted oil prices, which had been factoring in a risk premium due to the heightened tensions. While former President Trump’s threats of military action against Iran remain a concern, Assuaibi assesses the probability of a full-scale conflict as relatively low.
Looking ahead, market focus will center on crucial economic data releases from the world’s largest oil consumer. In the US, the January non-farm payrolls report is due this week, while the Consumer Price Index (CPI) will be released on Friday. Simultaneously, China’s January CPI data will be published at the end of the week, providing further insights into the import demand of the world’s largest oil importer, particularly as the country approaches the Lunar New Year holiday.
Domestically, positive signals are emerging. Indonesian Finance Minister Purbaya Yudhi Sadewa anticipates that tax revenues in 2026 will exceed targets set in the state budget, despite a relatively low growth base last year. The latest Consumer Confidence Index (IKK) has risen by 3.5 points to 127 in January 2026, reaching its highest level in a year, since January 2025. This increase in consumer optimism suggests strengthening domestic demand.
These combined factors have led Assuaibi to project a fluctuating but generally strengthening Rupiah for today’s trading session, , within the range of IDR 16,760 to IDR 16,800 per USD.
The Rupiah’s recent performance reflects a broader trend of stabilization following a period of pressure in 2025, as noted by GBG Indonesia in a recent analysis. While the currency has faced challenges from global macroeconomic shifts and domestic headwinds, supportive policy buffers from Bank Indonesia (BI) are helping to anchor its value.
BI appears more optimistic about the Rupiah’s prospects than the Ministry of Finance. Governor Perry Warjiyo has projected a strengthening to the IDR 16,000–16,500 per USD range, a more bullish outlook than the government’s macroeconomic assumptions in the 2026 Draft State Budget, which placed the exchange rate in the IDR 16,500–16,900 range. However, economists, including David Sumual, Head of Economics at Bank Central Asia (BBCA), are forecasting a more moderate stabilization around IDR 16,500 per USD, citing expectations of improved commodity prices driven by Chinese fiscal stimulus and a reduction in trade war uncertainties.
Despite the positive outlook, Sumual does not foresee a significant appreciation of the Rupiah to levels below IDR 15,000 per USD in the near term, citing a lack of new catalysts, particularly in commodity prices. This cautious assessment aligns with the findings of IndonesiaPulse, which highlights the Rupiah’s outlook as being tested by political uncertainty and mixed macroeconomic fundamentals, despite supportive policy buffers.
The Rupiah closed at IDR 16,810.50 at on , a slight weakening of 0.03% or 5.50 points. The US dollar index, meanwhile, strengthened by 0.10% to 96.91. Earlier in the day, at , the Rupiah had shown a marginal gain of 0.02% to IDR 16,801 per USD, while the dollar index edged up 0.07% to 96.88. Trading opened at with the Rupiah gaining 0.06% or 10 points to IDR 16,795 per USD, and the dollar index rising 0.08% to 97.57.
The Rupiah’s performance will continue to be closely watched by businesses and investors, particularly those involved in import-dependent sectors. The currency’s stability is crucial for maintaining price stability and supporting economic growth in Indonesia.
