Rupiah weakens amid caution over BI's policy direction
Employees show rupiah and US dollar banknotes at the Ayu Masagung currency exchange outlet in Jakarta on Tuesday (12/5/2026). The rupiah exchange rate against the US dollar at the close of trading on Tuesday (12/5) weakened 115 points or 0.66 percent to Rp17,529 per US dollar from the previous close of Rp17,414 per US dollar, affected by expectations of a longer period of high Fed interest rates. ANTARA FOTO/Indrianto Eko Suwarso/kye
The rupiah in today's trading is expected to weaken in the range of Rp18,000-Rp18,050 per US dollar, influenced by domestic factors of market participants' caution towards the direction of BI policy under the new Governor
Jakarta (ANTARA) - The rupiah exchange rate on Tuesday morning moved weakened by 61 points or 0.34 percent to Rp18,070 per US dollar compared to the previous close of Rp18,009 per US dollar.
Analyst from Bank Woori Saudara, Rully Nova, stated that the rupiah weakened amid market participants' caution towards the policy direction of Bank Indonesia (BI) under the new Governor.
"The rupiah in today's trading is expected to weaken in the range of Rp18,000-Rp18,050 per US dollar, influenced by domestic factors of market participants' caution towards the direction of BI policy under the new Governor," he said to ANTARA in Jakarta on Tuesday.
As known, BI Senior Deputy Governor Destry Damayanti was appointed as the interim Governor of BI following the resignation of Perry Warjiyo from his position.
Furthermore, the government will issue a Presidential Decree regarding the honorable dismissal of Perry Warjiyo from the position of BI Governor. After these administrative steps, the process of replacing the BI Governor enters a transition period before the President proposes a new definitive BI Governor candidate.
In accordance with the provisions of the Bank Indonesia Law, the President proposes the name of the new BI Governor candidate to the People's Representative Council (DPR) RI. Subsequently, the DPR RI's Commission XI conducts a fit and proper test before granting official approval.
Once approved by the DPR, the candidate is then appointed and sworn in by the President as the definitive BI Governor.
"The new BI Governor needs to prioritize institutional strengthening, especially monetary operational policies that affect the money supply and inflation expectations, where BI should not directly purchase government bonds in the primary market," Rully revealed.
Meanwhile, global sentiment is considered quite positive with the US dollar index moving stably and falling oil prices amid a pause in the conflict between the US and Iran.
Citing Anadolu, US President Donald Trump instructed a suspension of further attacks on Iran, thus ending the attacks that had lasted for 13 consecutive days.
Iran said it is currently not negotiating with the United States and any future talks will depend on a change in Washington's attitude. Iranian Foreign Ministry Spokesman Esmaeil Baqaei denied reports that Tehran had requested negotiations with the US.
