Middle East Tensions Rise, Bank Indonesia Ensures Rupiah Remains Aligned with Fundamentals

Jakarta – Bank Indonesia (BI) has issued a statement regarding escalating Middle East conflict following strikes by the United States and Israel on Iran, with subsequent retaliatory attacks by Iran on neighbouring countries.

Erwin Gunawan Hutapea, Head of the Monetary Management and Securities Assets Division (DPMA), stressed that in line with the escalation of Middle East conflict following US strikes on Iran, which has triggered risk-off sentiment in global financial markets, BI will continue to carefully monitor market movements and respond appropriately, including ensuring the rupiah exchange rate moves in line with its fundamentals.

“Bank Indonesia will continue to be present in the market through interventions, including Non-Deliverable Forward (NDF) transactions in overseas markets as well as spot and Domestic Non-Deliverable Forward (DNDF) transactions in domestic markets,” Erwin affirmed in an official statement on Monday (2 March 2026).

He further noted that BI will continue to optimise policy to enhance the effectiveness of interest rate policy transmission.

The rupiah opened weaker against the US dollar in the first trading session of the week on Monday (2 March 2026), responding to heightened geopolitical tensions in the Middle East following Israeli and US strikes on Iran over the weekend.

According to Refinitiv data, the rupiah depreciated to the level of Rp16,810/US$ or weakened by 0.30%. After the previous trading session on Friday (27 February 2026), the rupiah had ended trading with a decline of 0.06% at the level of Rp16,760/US$.

Meanwhile, the US dollar index (DXY) at 09:00 WIB was observed in positive territory with a gain of 0.22%, rising to the level of 97.821.