JAKARTA (TimesofIDN) – The Indonesian rupiah faced pressure in today’s trading session following the U.S. Federal Reserve’s decision to maintain its hawkish stance, keeping the Fed Fund Rate steady at 4.25%-4.50% in July 2025.
Erwin Gunawan Hutapea, Head of the Monetary Management and Securities Department at Bank Indonesia (BI), noted that The Fed’s move impacted not only the rupiah but also other global currencies.
“The rupiah’s movement today aligns with the weakening of other regional currencies,” Erwin told CNBC Indonesia on Thursday (31/7/2025).
Citing Refinitiv, the rupiah depreciated by 0.27% at the opening of trading, reaching Rp16,430 per U.S. dollar, and further weakened to Rp16,455 per U.S. dollar.
Erwin attributed the rupiah’s decline primarily to the broad strengthening of the U.S. dollar, driven by The Fed’s decision, which markets perceived as hawkish.
“The Fed’s decision to maintain the Fed Fund Rate, combined with data showing improved U.S. economic growth, was relatively hawkish,” he explained.
The Fed’s stance was underpinned by its assessment that the U.S. economy remains resilient amid the Trump administration’s tariff policies. However, the central bank also acknowledged potential inflationary pressures and increasing economic uncertainty ahead.
“This could impact riskier assets, including currencies of developing countries,” Erwin added.
In response, BI reaffirmed its commitment to stabilizing the rupiah’s exchange rate in line with its fundamental value. This includes implementing triple intervention measures through spot transactions, Domestic Non-Deliverable Forwards (DNDF), purchases of government securities (SBN), and Non-Deliverable Forward (NDF) transactions in offshore markets.
“BI will continue to ensure a balance between foreign exchange supply and demand in the domestic market to maintain market confidence,” Erwin emphasized.
