The US dollar is increasingly favored, with the rupiah traded above Rp15,000 since September 21, 2022.

The Indonesian Rupiah has been trading above Rp15,000 per United States dollar (USD) since September 21, 2022.

The US central bank (Federal Reserve/The Fed), which has raised its benchmark interest rate throughout the year, has caused the USD to appreciate against major world currencies, including the Rupiah.

The strengthening of the USD against major world currencies is evident from the US dollar index (DXY), which has risen 18.41% to 113.29 on October 10, 2022, compared to its position at the end of December 2021 (year-to-date/YTD).

The Rupiah exchange rate in the Jakarta Interbank Spot Dollar Rate (JISDOR) closed at Rp15,299 per USD on Monday (10/10/2022). This represents a weakening of Rp53 per USD (0.35%) from the previous closing, anticipating a further increase in US interest rates. Compared to its position on September 20, 2022, the Rupiah has weakened by Rp324 per USD (2.16%).

For information, The Fed again raised the US dollar interest rate by 75 basis points (bps) to the range of 3-3.25% at the FOMC meeting on September 20-21, 2022. This has made the USD even stronger against world currencies.

This step was also followed by Bank Indonesia (BI) which raised its benchmark interest rate, the BI-7Days Reserve Repo Rate (BI7DRR), by 50 bps to 4.25% at the Governor's Board Meeting on September 21-22, 2022. This step maintains a net interest rate differential between the Rupiah and the USD of 100 bps.

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