Are US Bond Yields Behind the Dollar's Strength?
The rise in U.S. bond yields is affecting the preferences of global investors.
Bank Indonesia Governor Destry Damayanti explained on Wednesday, September 23, 2026, that rising U.S. Treasury bond yields have contributed to the continued strength of the U.S. dollar against both developed and developing countries. The 10-year U.S. Treasury yield had reached 5.02 percent as of September 15, 2026, marking the highest level since October 2023.
On September 23, 2026, Trading Economics reported the U.S. government bond yield at 4.97 percent, influenced by expectations of a Fed Funds rate hike and the U.S. budget deficit.
Meanwhile, Indonesia's balance of payments showed a US$0.12 billion surplus in July 2026, following a US$0.45 billion deficit in June. Net inflows in the third quarter until September 21, 2026, amounted to US$0.4 billion. Bank Indonesia attributed this inflow to global government bond issuances and inflows in government securities.
The central bank also highlighted the strengthening of the rupiah exchange rate during August and mid-September 2026, supported by monetary policies aimed at stabilizing the currency. This included expanding incentive policies to increase foreign portfolio investment inflows and deepening the money market and foreign exchange market. However, the rupiah experienced a 0.78 percent decrease against the U.S. dollar since the end of August 2026, with Bank Indonesia estimating a more stable future exchange rate.
Written by urgent.news from Tempo.co English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
