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27/07/26
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USD/IDR Rises on Rupiah Weakness After Bank Indonesia Governor Resignation
USD/IDR advanced in Asian trading on Monday, recovering the previous session’s losses and hovering around 18,050 as the Indonesian rupiah weakened sharply. The move followed the surprise resignation of Bank Indonesia Governor Perry Warjiyo, a development that unsettled investors and revived concerns about the central bank’s independence. Senior Deputy Governor Destry Damayanti has been named interim governor, and the departure was attributed to personal reasons.
The rupiah’s decline reflects the sensitivity of local markets to changes at the top of monetary policy. A sudden leadership shift at Bank Indonesia can raise questions about policy continuity at a time when inflation, capital flows, and external financing conditions remain important for the economy. For now, traders appear to be pricing in a period of greater uncertainty.
At the same time, the pair’s upside may be capped by a weaker US Dollar. The dollar came under pressure as geopolitical tensions eased after a pause in military hostilities between the US and Iran over the weekend, reducing demand for safe-haven assets. The retreat in the greenback helped offset some of the rupiah-driven gains in USD/IDR.
Even so, markets remain alert to the risk of renewed disruption. Concerns persist over possible supply shocks after Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities near the Red Sea. Broader regional risks continue to influence trading sentiment despite the temporary truce in direct US-Iran conflict.
In the US, traders expect the Federal Reserve to leave rates unchanged at its meeting on Wednesday, with many still anticipating a resumption of hikes in September. A smaller group of investors has not ruled out an unexpected move this week. Attention is also turning to upcoming data, including second-quarter GDP, PCE inflation, and earnings from major US companies, which may offer a clearer view of the economy’s momentum.
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