Iran Conflict Escalation Threatens to Weaken Rupiah to Rp 17,000 This Week
Jakarta – Currency analysts have warned that escalating geopolitical conflict in Iran could cause the Indonesian rupiah to weaken to Rp 17,000 per US dollar during the current week.
The rupiah closed the previous week on Friday, 27 February 2026, at Rp 16,787 per dollar, down 0.17 per cent.
Lukman Leong, Chief Analyst at Doo Financial Futures, stated that the rupiah faces potential continued depreciation against the US dollar this week as risk-off sentiment intensifies due to Middle Eastern conflict escalation. He projected the rupiah would trade in the range of Rp 16,750–16,900 per dollar on Monday, 2 March 2026, but cautioned that weakening to Rp 17,000 remained a significant possibility during the week.
“The rupiah is expected to weaken against the US dollar in the range of Rp 16,750–16,900. The opportunity for weakening to Rp 17,000 this week is quite substantial,” Leong told Kompas.com on Monday.
Bank Indonesia continues to reinforce rupiah stability through intervention mechanisms including Non-Deliverable Forward (NDF) transactions in overseas markets and spot transactions and Domestic Non-Deliverable Forward (DNDF) trades in domestic markets. These efforts are complemented by purchases of government securities in secondary markets.
The release of inflation figures and trade balance data by the Central Statistics Agency on Monday was expected to provide positive sentiment and support the rupiah.
Currency and commodities analyst Ibrahim Assuaibi similarly projected that escalating conflict between the United States and Israel against Iran could trigger significant rupiah weakening. Recent developments announced by the US regarding the death of Iran’s supreme religious leader, coupled with Iranian retaliatory strikes against Israel and US military installations in the Middle East, indicate that conflict will likely continue in both the short and medium term.
“The impact is quite extraordinary – gold prices will likely rise, precious metals will rise, and the rupiah will weaken,” Assuaibi stated on Saturday, 27 February 2026.
With two external negative sentiments, the rupiah is projected to reach Rp 17,000 per dollar.
“Trade tensions between Indonesia and America continue to intensify, and coupled with the ongoing Middle Eastern conflict, the rupiah will likely experience significant depreciation. So next week the rupiah could very well move to the 17,000 level,” Assuaibi told media on Sunday, 1 March 2026.
Assuaibi urged Bank Indonesia to urgently implement intervention measures in the money market to address the rupiah’s weakness.