Analyst Predicts Rupiah Could Breach Rp18,000 by End of May

4 hours ago 3

TEMPO.CO, Jakarta - The rupiah could weaken beyond Rp18,000 per U.S. dollarby the end of May and potentially slide further to Rp22,000 if external pressures persist, according to Ibrahim Assuaibi, director of futures brokerage firm PT Traze Andalan Futures.

The rupiah briefly fell to around Rp17,600 per U.S. dollar in Friday morning trading on May 15, 2026, amid mounting global uncertainty.

“If the exchange rate breaches Rp18,000 this May, there is a strong possibility the rupiah could move toward Rp22,000,” Ibrahim said in a statement on Friday.

He described Thursday and Friday, May 14–15, as a critical test for Indonesia’s financial markets, as geopolitical tensions in the Middle East continued to escalate during the country’s trading holiday.

According to Ibrahim, Bank Indonesia was only able to intervene in offshore markets while domestic trading was closed, limiting its ability to cushion the rupiah from external shocks. He added, however, that market conditions could improve once domestic trading resumes on Monday, May 18.

Externally, Ibrahim attributed the U.S. dollar’s strength to expectations that the U.S. Federal Reserve will keep interest rates elevated throughout 2026 amid persistent inflationary pressures in the United States.

Domestically, he warned that a weaker rupiah would place greater strain on Indonesia’s state budget, particularly through rising energy subsidy costs. He said a deeper depreciation beyond Rp18,000, or even Rp22,000, per dollar could prompt Bank Indonesia to raise its benchmark BI-Rate at its next policy meeting in June, he said.

“It could be a 25 to 50 basis point hike aimed at stabilizing the rupiah,” Ibrahim said.

The rupiah has remained under pressure in recent months as investors respond to global market volatility, higher U.S. interest rates, and concerns over geopolitical risks.

Disclaimer: This article is not intended to encourage speculation in foreign exchange trading. Any investment or trading decisions remain the responsibility of readers.

Read: Why Has Danantara Indonesia Not Released Its Financial Report?

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