Business · Markets · 2 hrs ago
Bank Indonesia links rupiah weakness to geopolitical tensions and market sentiment
On October 20, the rupiah stood at 17,985 per US dollar, after weakening 0.61% from the end of September.
Bank Indonesia Governor Destry Damayanti said the decline reflected rising Middle East tensions, tighter US monetary policy and foreign investor sentiment in the stock market.
The rupiah is Indonesia’s currency, and its value against the dollar can be affected by global events and investor decisions.
Bank Indonesia says it is using monetary tools and incentives to support the currency and encourage foreign investment.
Its hedging-cost incentives, introduced in June 2026, had attracted 9.9 billion US dollars in foreign capital by October 20.
The central bank expects the rupiah to move more steadily, supported by its policies, attractive returns, controlled inflation and the domestic economic outlook.
The rupiah stood at Rp17,985 per US dollar on October 20, 2026, after weakening 0.61% from the end of September.
Bank Indonesia Governor Destry Damayanti attributed the decline to Middle East geopolitical tensions, tighter US monetary policy and foreign investor sentiment in the stock market.
The central bank said it would use its monetary instruments to support rupiah stability and encourage foreign portfolio investment.
A hedging-cost incentive introduced in June 2026 had attracted US$9.9 billion in foreign capital by October 20.
Bank Indonesia expects the rupiah to move steadily, supported by attractive returns, controlled inflation and a sound domestic economic outlook.
- Who
- Bank Indonesia and Governor Destry Damayanti.
- What
- The rupiah weakened, and Bank Indonesia linked the decline to geopolitical tensions and market sentiment.
- When
- The exchange-rate figure was recorded on October 20, 2026; Destry discussed it on October 21.
- Where
- The announcement was made at Bank Indonesia’s office in Central Jakarta.
- Why
- Bank Indonesia cited escalating tensions in the Middle East, tighter US monetary policy and foreign investor sentiment in the stock market.
This story does not have two clearly opposing sides.
Bank Indonesia introduced a hedging-cost incentive policy.
The comparison period for the rupiah’s subsequent 0.61% point-to-point weakening.
The rupiah stood at Rp17,985 per US dollar, and foreign capital attracted by the incentive had reached US$9.9 billion.
Destry Damayanti discussed the rupiah and its drivers at a Bank Indonesia press conference in Jakarta.
- Rupiah exchange rate
- Rp17,985 per US dollar on October 20, 2026
- Change
- Weakened 0.61% point to point from the end of September 2026
- Foreign capital attracted
- US$9.9 billion by October 20, 2026
- Incentive introduced
- June 2026
- Main pressures cited
- Middle East tensions, tighter US monetary policy and foreign investor sentiment in the stock market
What people are saying
The developments were influenced by escalating geopolitical tensions in the Middle East, the direction of tighter US monetary policy, and foreign investor sentiment in the stock market.
Going forward, Bank Indonesia expects the rupiah exchange rate to move steadily, supported by Bank Indonesia’s commitment, attractive returns, inflation controlled within its target, and a domestic economic outlook that remains good.