Geopolitical Tensions Rise, Rupiah Weakens

The rupiah exchange rate weakened by 52 points, or 0.29 per cent, to Rp18,066 per US dollar on Thursday morning, compared with the previous close of Rp18,014.

Permata Bank chief economist Josua Pardede attributed the rupiah’s weakness to rising geopolitical tensions in the Middle East.

“The rupiah weakened alongside the majority of Asian currencies as geopolitical tensions in the Middle East increased, weighing on risk sentiment across the region,” Josua told Antara in Jakarta on Thursday, 9 July 2026.

The escalation referred to is a US military strike on Iran, which has dimmed hopes of a peace agreement being reached in the region in the near term. The continuing escalation has created greater shipping problems in the Strait of Hormuz, raising concerns about supply disruptions in the Middle East.

The strike also came shortly after the US withdrew a key concession that had allowed Iran to sell oil internationally, a move that signals a tighter oil market in the weeks ahead.

Crude oil prices have also risen above US$75 per barrel, adding pressure on emerging market currencies.

Another factor was the release of the June 2026 Federal Open Market Committee (FOMC) minutes, which reaffirmed policymakers’ concerns about persistent inflationary pressures.

Based on these factors, the rupiah is expected to trade in a range of Rp17,975 to Rp18,125 per US dollar.