The Indonesian rupiah opened stronger against the U.S. dollar on the first trading day of June, Tuesday (June 2, 2026), following the long holiday period over the previous weekend.

According to Refinitiv data, the rupiah started trading in positive territory, appreciating by 0.08% to Rp17,850 per U.S. dollar.

This gain followed the previous trading session on Friday (May 29, 2026), when the rupiah experienced a sharp decline of 0.51% and closed at Rp17,865 per U.S. dollar.

Meanwhile, the U.S. Dollar Index (DXY), which measures the strength of the greenback against six major global currencies, remained relatively stable. As of 09:00 WIB, the index stood at 99.201 after closing 0.30% higher on Monday.

The rupiah’s movement today continues to be influenced by both domestic and international factors.

On the domestic front, Bank Indonesia (BI) has continued calibrating its foreign exchange policy instruments to maintain the stability of the rupiah exchange rate.

Through Board of Governors Regulation No. 7 of 2026, BI officially reduced the limit for U.S. dollar purchases without underlying transaction documents from US$100,000 to US$50,000 starting in April 2026. Beginning in early June 2026, the limit was further lowered to US$25,000 per participant per month.

This tightening of transaction documentation requirements in the spot market has been accompanied by broader flexibility in the derivatives market. For instruments such as sell forwards and swaps, the transaction limit without underlying documentation has been increased to US$10 million per transaction.

In addition, market participants continue to be encouraged to utilize the Local Currency Transaction (LCT) scheme for bilateral trade activities. As of April 2026, total LCT transaction volume had reached US$22.61 billion.

Externally, movements in the U.S. dollar remain an important factor to monitor. The dollar strengthened during overnight trading after posting a modest weekly decline in the previous week. This occurred as investors continued to assess the latest developments surrounding peace negotiations in the Middle East.

Previously, the U.S. Dollar Index had weakened amid expectations that an agreement between the United States and Iran regarding the reopening of the Strait of Hormuz was drawing closer. The closure of this critical oil shipping route had previously driven oil prices higher and worsened inflation prospects, leading to speculation that the Federal Reserve could raise interest rates later this year.

However, the U.S. dollar regained strength after reports emerged that Iran’s negotiating team had suspended message exchanges with the United States through intermediaries following attacks in Lebanon. Subsequently, U.S. President Donald Trump stated that he had communicated through intermediaries with Hezbollah, the Iran-backed Lebanese militia group, and received assurances that the group would not launch attacks against Israel. Those remarks later trimmed part of the dollar’s gains.

The strengthening of the U.S. dollar in global markets may ultimately limit the appreciation potential of other currencies, including the Indonesian rupiah.