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USD/IDR rebounds after Bank Indonesia holds rate at 5.75%
USD/IDR was quoted near 17,950 in European trading after the rupiah slid despite BI keeping its July benchmark unchanged.
The USD/IDR pair rebounded from its daily losses during Wednesday’s European session, trading around 17,950, as the Indonesian rupiah weakened after Bank Indonesia held its benchmark interest rate steady at 5.75% in July.
The BI decision came as a surprise to many market participants, who widely expected a 25-basis-point hike to support the rupiah. The article also points to BI’s KLM program, which added 431.9 trillion rupiah in additional liquidity into the financial system as of early July, supporting loan growth.
Bank Indonesia’s June loan growth rose to +12.67% year-over-year, and the full-year 2026 lending outlook remains on track for an 8% to 12% target range. Still, upside for USD/IDR could be tempered as the US dollar faces pressure even as risk aversion rises amid escalating US-Iran geopolitical tensions.
The piece also cites CME FedWatch, showing markets pricing in more than 69% odds of at least a 25-basis-point rate hike at the September meeting, even though the Fed is widely expected to keep the federal funds rate unchanged. It says expectations for tighter policy remain elevated beyond July.