RRI.CO.ID, Jakarta - Indonesia's currency, the rupiah, weakened to above 17,800 per US dollar after the US Federal Reserve decided to keep its benchmark interest rate unchanged at 3.75%. The Fed also projected that inflation in the United States could remain elevated until 2028.

The central bank's latest outlook suggests that policymakers may maintain a hawkish stance in the coming years. Markets are now pricing in the possibility that the Fed could keep interest rates higher for a longer or even raise rates once or twice in 2026.

Following the Fed's decision, the US Dollar Index strengthened to 100.24. The stronger dollar added pressure on emerging market currencies, including the Indonesian rupiah, which fell to around 17,850 per US dollar, on Thursday , 18 June 2026.

At the same time, Japan's central bank raised its benchmark interest rate to 1%, the highest level in more than three decades. This move also affected global capital flows, as the Japanese yen has long been widely used in carry trade strategies.

The weaker rupiah diminished investor sentiment in Indonesia's financial markets. During the opening session, the Jakarta Composite Index (IHSG) declined to 6,191, reflecting concerns over currency volatility and external risks.

While most Asian stock markets traded in mix fashion with a positive bias, Indonesian investors remained cautious. Market participants are closely watching the latest MSCI review, which is expected to be announced during European trading hours.

One of the biggest questions is whether Indonesia will retain its status as an emerging market or be downgraded to a frontier market. Meanwhile, global gold prices remained relatively stable at around US$4,318 per troy ounce, equivalent to approximately Rp2.49 million per gram.

Writer: Gunawan Benjamin (Economist, Islamic University of North Sumatra)